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Additional Living Expenses

What Is Additional Living Expenses Coverage?

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Your home insurance policy can protect you from so much more than physical damage to your property and liability claims. Additional Living Expenses coverage is included in most home insurance, condo insurance, and tenant insurance policies. It can help cover out-of-pocket expenses when you’re forced to leave home because of an insured event or government-ordered evacuation.

The three main components to Additional Living Expenses coverage

  1. Additional living expenses  This covers reasonable expenses like food, hotel or rental home charges, and other costs you wouldn’t normally face while living in your own home.
  2. Fair rental value – If you rented out part of your home before a loss and it is unsafe for your tenant to continue living in their unit while repairs are being done, your policy could pay for your loss of rental income until the property is restored.
  3. Prohibited access – This pays for additional living expenses when you’re forced to leave your home because of an emergency that happened at one of your neighbors’ houses or when the government issues a mass evacuation notice (during a natural disaster, for example).

Specific coverage varies by provider, but the combined limit for all three of these categories usually adds up to 20% of your building limit (Coverage A)

What isn’t covered under Additional Living Expenses?

When you have to leave your home in an emergency, Additional Living Expenses coverage can help you maintain a reasonable standard of living by covering costs you don’t normally face — but it’s not intended to put you in a better situation than you were in before your loss, so it won’t pay for all of your regular expenses. For example, if you’re forced to relocate and there’s no kitchen in your temporary residence, the additional cost (or the difference in price) of eating in a restaurant would be covered. But if your temporary home does have a kitchen, your policy wouldn’t cover groceries, since groceries are a normal living expense.

To learn more about your Additional Living Expenses coverage and how it could help you out in an emergency, contact your HMS Insurance broker.