If your rental home becomes uninhabitable because of an event like a fire and you need to relocate until the damage is repaired, the additional living expense portion of your renters insurance policy could save you a lot of money.
This is because additional living expense coverage reimburses some of the increased costs you have to pay when you’re temporarily unable to live in your rental home due to a covered loss.
Specifically, additional expense coverage can help pay your extra rent, food, transportation and other living costs until you return home.
In this article
What is additional living expense coverage for renters insurance?
Additional living expense (ALE) coverage helps you with extra or increased costs associated with temporarily relocating after a covered loss damages and makes your rental home uninhabitable.
Most standard renters insurance policies include ALE coverage that reimburses additional living expenses if your rental home becomes unlivable due to damage or destruction caused by:
- Fire or smoke
- Weight of snow, ice or sleet
- Burst water pipes
- Falling objects
The additional living expense portion of your renters insurance policy can be a budget-saver, if not also a lifesaver, especially if you aren’t flush with cash.
Think about how much it would cost to stay at a hotel for a month compared to what you pay in rent. Add to that what you’d need to pay for meals, laundry and more while in temporary housing, and it’s easy to see how ALE coverage can come in handy if damage or destruction forces you out of your rental home for a time.
Which additional living expenses are covered?
Additional living expense coverage typically reimburses you for extra costs tied to things like:
- Hotel stays or other temporary housing
- Restaurant and other meal-related bills
- Transportation, including rental cars and parking
- Pet boarding
- Storage fees
Keep in mind that ALE only reimburses you for increases to these costs that take them above what you would normally pay. In other words, your renters insurance policy’s ALE coverage won’t pay 100% of these expenses, but rather the difference between what you’d usually pay and what you pay while living in temporary housing.
For example, if you currently pay $1,200 a month in rent and the temporary housing you relocate to costs $1,400 a month, the additional living expense coverage of your renters insurance policy will reimburse you the $200 difference.
Your extra food and gas bills may be treated similarly. Maybe you usually spend $200 a week on groceries, but you have to spend $250 a week on meals from restaurants while living in a hotel temporarily. The ALE coverage of your renters insurance policy might reimburse you for the $50 increase. It also might reimburse you if you need to spend more money on gas because your temporary housing is further from your job than your rental home.
The maximum amount of additional living expenses your renters insurance will cover is often based on your policy’s personal property limit. A typical ALE limit is 30% of your personal property limit. Don’t take that as gospel, though; review your policy documentation to learn the specific limits of your own renters insurance ALE coverage.
Renters insurance policies also usually limit how long they will cover additional living expenses. The most common time limit for ALE coverage is 12 months after a claim, but some policies cover additional living expenses for 24 months or longer.
What does additional living expense coverage exclude?
While renters insurance ALE covers a wide range of situations, it doesn’t cover everything. Some common additional living expense coverage exclusions:
- Damage from floods or earthquakes. Renters can get separate policies for flood damage or earthquakes.
- Damage caused by pests.
- Damage or destruction due to terrorism or nuclear war.
- Mandatory evacuations, with the exemption of evacuation due to fire.
- Your insurer decides your rental unit is livable.
Frequently asked questions
Yes, loss of use coverage and additional living expense coverage are the same thing. Both will reimburse the extra costs you incur while living in temporary housing if a covered peril forces you from your rental home.
You might think your landlord’s insurance will cover your relocation costs if you have to temporarily move out of your apartment because of a burst water pipe, fire or windstorm. Unfortunately, that’s not the case. Your landlord’s insurance policy only covers the structure of your rental home, not your personal property or any of your living expenses.
Yes, the additional living expense coverage of your renters insurance will pay some of your hotel costs if you’re forced out of your rental home due to a covered peril. See your policy for the exact amount of reimbursement in this and other situations.
Additional living expense coverage usually lasts for 12 to 24 months. Clarify with your insurance provider if you’re unsure how long your ALE coverage will last.
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