What additional living expense coverage is for
Most homeowner policies include coverage often called additional living expenses (ALE) or loss of use. The idea is to pay the increase in your costs because you cannot live at home: temporary housing, extra mileage, the difference between restaurant meals and your usual grocery bill, laundry, and similar costs. It usually does not pay for what you would have spent anyway, like your mortgage.
Policies set limits by dollar amount, by time, or both. Renters' policies often include a similar benefit. Read the loss of use section of your policy, or ask your agent to explain it, before signing a lease or booking a long hotel stay.
In the south metro, families often try to stay within the same school attendance area and close to work. Furnished short-term rentals near Centennial, Littleton, Lone Tree and the Tech Center can be limited at times. Tell your adjuster early what you need, including bedrooms, accessibility and commute, so housing options can be found that the insurer agrees are reasonable.
Points that often surprise people
- Comparable, not upgraded
- Insurers typically aim for housing similar to your home, not nicer
- Normal costs are subtracted
- Expenses you would have had anyway are generally not reimbursed
- Clock and cap
- Coverage can end at a time or dollar limit even if the rebuild runs late
- Receipts rule
- Undocumented spending is hard to recover later
Records to keep from the first night
- Hotel and rental receipts, plus any lease or booking terms
- A simple log of extra miles driven for school, work and trips to the damaged house
- Restaurant and grocery receipts, kept separately from your normal spending
- Laundry, storage unit and furniture rental costs
- Utility bills for the temporary place and for the damaged house
- Notes of every conversation with your adjuster, including the date and what was agreed
Hotel or short-term rental?
Hotel makes sense when
- The repair is expected to be short
- You need somewhere tonight
- It is a household of one or two
- You want laundry and cleaning handled
A furnished rental makes sense when
- Reconstruction will take months
- You have children in school nearby
- Cooking at home matters for health or cost
- You need space to sort recovered contents
Ask your insurer early
- What is my loss of use limit, in time and in dollars?
- Will you pay a landlord directly, or do I pay and submit receipts?
- How is the food allowance calculated?
- What happens if reconstruction is delayed by permits or materials?
- Is a mortgage or HOA dues relief available, or only extra costs?
General information for Centennial, not a quote or professional advice. In an emergency, call 911.