The A-B-C’s of A-L-E (Additional Living Expenses)
December 8th, 2014
The Additional Living Expenses (ALE) Coverage within your policy is designed to indemnify you for the amount spent above your normal expenditures as a result of living away from the residence premises rendered uninhabitable by a covered loss. The time allowed for reimbursement of these expenses is usually found in the policy and only for the reasonable time needed to repair or replace the home. The standard of living for the alternate living arrangements should be essentially the same as those prior to the occurrence. It is extremely important to save all receipts for ALE.
Examples of Additional Living Expenses include:
Housing – Normal expenses for housing would continue even if you were required to live elsewhere. Mortgage payments and taxes would continue. If your family had to live in a hotel for a week, the cost of the hotel room would be an increase above the normal amount you would pay for living in the dwelling. Be sure to save all receipts.
Utilities – Electric bill expenses may increase due to the use of drying or mitigation equipment. Fuel bills, phone bills, and water bills may also increase. You should contact your utility companies to obtain the bills for the same months last year to compare them to your new bills.
Food/Meals – If you and your family are required to eat away from home, the only expense to be considered would be the difference between the amount actually spent while away from home and the amount normally spent at home. Let’s assume that you and your family had to eat in a restaurant for a week because your home was uninhabitable. If the reasonable cost for eating out was $125 and your family normally spends $50 then you would be entitled to be compensated for the necessary increase, which is $75. Save all restaurant receipts.
Transportation – If you are required to drive further than normal, the additional expense would be a compensable item. It is usually suggested that a per-mile allowance, that is, the current IRS allowance, is an accurate reflection of your actual cost of transportation when driving your vehicle the additional miles. You will need to keep a daily log of the number of extra miles you incur. The extra miles will be compared to what you would normally drive and the difference will be compensable.
Miscellaneous – Such items as laundry, garbage disposal, lawn service, etc. may have to be considered when making the ALE calculations. Save all invoices and receipts.
Written by: Kerry C. Crawford, BenchMark Public Adjusting Group
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