Home insurance includes several coverages to help homeowners recover after a covered loss. For example, loss-of-use coverage is part of most standard homeowner insurance policies and can help pay for living expenses if you have to leave your home while it is being repaired.
Also known as additional living expenses (ALE) coverage, loss of use coverage is essential for Florida homeowners as it can ensure they can maintain financial stability if their home is damaged or destroyed by a hurricane or fire.
To help you better understand how this policy can help protect you after a disaster, here’s everything you need to know about loss of use coverage for home insurance.
What Is Loss of Use Coverage?
Loss of use coverage is an essential aspect of home insurance that covers the additional living expenses a homeowner may incur if their home becomes uninhabitable due to a covered loss, such as a hurricane or fire.
This type of coverage helps homeowners maintain their standard of living while their home is being repaired or rebuilt. It may also help pay for living expenses if local authorities order you to evacuate your home.
What Does Additional Living Expenses Insurance Cover?
ALE coverage typically covers the additional expenses a homeowner incurs due to being displaced from their home, such as temporary housing, food, and transportation. This type of coverage helps homeowners maintain their standard of living, even if their home is uninhabitable.
Some of the expenses that ALE may cover include:
- Temporary housing: This can include the cost of a hotel, rental home, or another temporary shelter while your home is being repaired or rebuilt.
- Food expenses: This can include the cost of eating out and any additional grocery expenses you may incur due to being displaced from your home.
- Transportation expenses: This can include the cost of additional transportation expenses, such as rental cars or taxis, if you cannot use your usual mode of transportation while away from home.
Loss of use coverage can also help pay for things like daycare, pet boarding, storage units, and dry cleaning. Review your policy to learn more about what specific expenses qualify for coverage.
Keep in mind that ALE coverage only pays out when your policy covers the peril (the reason that you’re unable to live in the property). In other words, your property must receive damage from a covered hazard for your loss of use coverage to kick in.
Loss of Use Coverage Limits
Your loss of use coverage limit typically equals 20% of your dwelling coverage limit. Dwelling coverage is the portion of your home insurance that covers your home’s primary structure.
For example, if your home has $250,000 in dwelling coverage, your ALE coverage limit would be $50,000. Some insurance policies, including high-value home insurance, may offer higher loss-of-use coverage limits.
Does Loss of Use Coverage Have a Deductible?
Loss of use coverage typically doesn’t have a separate deductible; however, when you file a home insurance claim for property damage, you’ll still need to pay a deductible.
How to File an Additional Living Expenses Coverage Claim
If you need to file a claim for loss of use coverage, following the steps outlined in your insurance policy is essential. Typically, you must provide documentation of your expenses and proof of your loss, such as photos of the damage to your home or a police report.
It is also important to contact your insurance company as soon as possible after a loss occurs so that you can start the claims process and begin receiving coverage for your additional living expenses.
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Loss of use coverage is an essential part of your home insurance policy that can help you maintain financial stability and a high standard of living if your home is damaged or destroyed by a covered disaster.
At Levay Mack Insurance Group, our primary goal is to share our insurance knowledge so that you know what protection you are buying with your hard-earned money. With over 45 years of experience and as one of the largest independent insurance agencies in South Florida, we are proud to offer access to the top-rated carriers in the insurance industry.
Levay Mack has Florida covered from Palm Beach, St. Lucie and Brevard Counties! To learn more about our home insurance policy options, contact us today for a free quote.