Additional Living Expenses (ALE)
Additional Living Expenses (ALE) is the insurance coverage that pays the difference between a policyholder's normal living costs and the inflated costs of living elsewhere while their home is uninhabitable during covered repairs.
What ALE Actually Covers
Additional Living Expenses (ALE) is the insurance coverage that reimburses displaced homeowners for the difference between their normal living costs and the inflated costs of temporary housing during covered repairs. Most homeowners do not know ALE exists. Hotel stays, restaurant meals above their normal food budget, temporary rental housing, storage fees, and extra commuting costs all qualify under ALE coverage.
The key word is "difference." If the homeowner normally spends $400 a month on groceries and now spends $1,200 eating out while displaced, ALE covers the $800 gap. It does not reimburse the full amount.
How Much Coverage Is Available
ALE limits are typically set as a percentage of dwelling coverage, usually 20-30%. The math matters:
| Dwelling Coverage | ALE at 20% | ALE at 30% |
|---|---|---|
| $200,000 | $40,000 | $60,000 |
| $300,000 | $60,000 | $90,000 |
| $400,000 | $80,000 | $120,000 |
On large fire damage claims where repairs stretch 6-12 months, even a $90,000 ALE limit can get exhausted. A family of four in a hotel at $150 a night burns through $4,500 a month before meals and other expenses.
Why Contractors Should Care About ALE
ALE is not your money, but it directly affects your homeowner's willingness to move forward with the job. A homeowner who is hemorrhaging cash on temporary housing while waiting for the claims process to play out is a stressed homeowner. Stressed homeowners make bad decisions, delay approvals, or push you to cut corners to finish faster.
The smart play: help your homeowner file for ALE early, before the costs pile up. Make sure they keep receipts for everything. When the homeowner is financially stable during repairs, the whole project runs smoother.
ALE Pitfalls to Watch For
Carriers sometimes push back on ALE claims by arguing the home was habitable during repairs. If only the roof is being replaced and no interior damage exists, the carrier may deny loss of use entirely. Document habitability issues thoroughly: compromised structural integrity, active water intrusion, exposed electrical, or health hazards like mold all support the ALE claim. If the home is genuinely unsafe, photograph and document everything before repairs start. That documentation protects the homeowner's ALE claim from denial down the line.
Frequently asked questions
ALE limits vary by policy, typically 20-30% of the dwelling coverage amount. On a $300,000 dwelling policy, that is $60,000-$90,000 in available ALE. Large claims with extended repair timelines can exhaust this limit.
ALE covers the difference between your normal living costs and the increased costs during displacement - hotel stays, restaurant meals above your normal food budget, temporary rental housing, storage fees, and additional commuting costs.
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