Additional Living Expense coverage will cover any additional costs that you incur if you and your family are forced to leave your home temporarily due to an insured loss, or if you are unable to access your home due to a government evacuation order or sometimes due to damage to a neighbouring property.
This coverage is usually limited to a maximum of 20 or 30% of the replacement value of the home, as listed in the policy, or 12 months. The coverage is meant to pay for comparable accommodations to what you are used to, so it likely won’t pay for a five-star hotel or meals at a five-star restaurant.
If you need to leave your home due to an insured loss or evacuation order, your Additional Living Expense coverage will typically reimburse you the cost of a short-term rental or hotel accommodations, plus the cost of meals, laundry, and possibly even pet boarding, storage and mileage put on your vehicle.
It’s very important to note that the coverage is for “additional” expenses, so if you spend $1,500 a month for family meals while you are on a family meal in a restaurant, you will be reimbursed $150 minus whatever you would have paid for that meal if you made it at home. The same applies to mileage. You will only be reimbursed for mileage if your relocation requires you to drive more than you typically would.