Additional Living Expenses: What Insurance Pays While You're Out of Your Home
If a covered loss like a fire or burst pipe makes your home unlivable, most homeowners and renters policies pay your extra cost of living somewhere else: the hotel or rental, the difference in food costs, extra mileage and similar. It's usually called additional living expenses (ALE) or loss of use. It pays the increase over your normal bills, not your normal bills themselves, and it has a dollar or time limit. Keep every receipt.
When people think about their insurance after a fire or flood, they think about the house and their belongings. But for many families, the most stressful question in the first week is simpler: where are we going to live, and who is paying for it? That's what this part of your policy is for.
Where to find it in your policy
On a typical homeowners policy, look at the declarations page (the summary page at the front) for a line called "Loss of Use", often listed as Coverage D. Renters policies usually have it too, sometimes as Coverage C or D. Condo policies usually include it as well.
The limit is often written as a dollar amount, which on many homeowners policies is set as a percentage of the dwelling coverage. Some policies instead limit it by time, such as 12 or 24 months, or have both limits. Read yours, or ask your agent: "What's my loss of use limit, and is there a time limit?"
The key idea: it pays the difference
ALE is meant to keep your household's standard of living about the same as before the loss. So it pays the increase in your costs, not everything you spend.
- Example: foodYour family normally spends about $250 a week on groceries. Living in a hotel without a kitchen, you spend $500 a week eating out. ALE would usually pay about the $250 difference, not the full $500.
- Example: mileageThe rental home is 20 miles farther from work and school. The extra miles are often reimbursed.
- Example: housingYou still pay your mortgage. ALE pays for the hotel or rental on top of it, because that's a new cost you wouldn't have had.
What ALE often covers
- Hotel or short-term rental
- Furniture rental for a temporary home
- Extra food costs over your usual
- Extra mileage and tolls
- Laundromat costs
- Pet boarding if the hotel won't take pets
- Storage units
- Utility hookups at a temporary home
- Moving costs to and from the temporary home
- Extra child care if it's needed because of the move
Every policy and every insurer is different, so treat this as a list of things to ask about, not a promise.
What ALE usually doesn't cover
- Your normal mortgage, rent, car payments or insurance premiums.
- Upgrades: a luxury suite when your home was a modest three-bedroom.
- Costs from a loss your policy doesn't cover. For example, flood damage is usually excluded from standard homeowners policies, so ALE wouldn't apply either. National Flood Insurance Program policies generally don't pay living expenses.
- Costs after the home is livable again, or after a reasonable repair time has passed.
Ask for an advance
You don't have to front weeks of hotel bills on a credit card. Many insurers will give you an advance payment for living expenses in the first days of a claim, especially after a fire. Ask your adjuster directly. Some insurers also work with housing companies that can set you up in a furnished rental and bill the insurer.
If you're ordered to leave
Many policies also pay living expenses when a government order (like an evacuation for a nearby wildfire) keeps you out of your home, even if your home itself isn't damaged. This "civil authority" coverage is usually short, often around two weeks. Check your policy wording.
How to track it so you get paid
- Keep every receipt, even small ones. Snap a photo the same day.
- Keep a simple log: date, what, amount, and why it's extra.
- Write down your normal monthly costs (groceries, gas, utilities) so the "difference" is easy to show.
- Track mileage with a phone app or a notebook.
- Send receipts to your adjuster in batches, every week or two, instead of all at the end.
- Ask before big spending, like furniture rental or a long lease, so there are no surprises.
How long does it last?
Usually until the home is repaired and livable again, or for the "shortest time reasonably needed" to repair or replace it, up to your policy's limit. Long repairs can run into those limits. If your repairs are dragging on, keep your adjuster updated on why, and ask early how much ALE coverage is left.
The bottom line
If you can't live at home after a covered loss, your policy probably helps with the extra cost of living somewhere else. Find the Loss of Use line on your declarations page, ask for an advance, keep every receipt, and remember it pays the difference, not your normal bills.
General information only, not legal or insurance advice. Coverage depends on your policy, your insurer and your state. Read your policy and ask your agent or adjuster.