Proving Additional Living Expenses Insurance Claims

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

What is an additional living expenses insurance claim?

Additional living expenses (ALE) are living expenses incurred as a result of a covered event that go above and beyond what the insured would have spent absent the loss. Generally, ALE are measured as the difference between the insured’s normal living expenses and the extra living expenses incurred due to the insured loss. For example, if your home becomes uninhabitable as a result of the loss, and you must stay in a hotel room for a week, your insurer may be required to reimburse you for some or all of those additional expenses. A typical policy will require your insurer to cover no more than an amount equal to 20% of the insurance value of your home. Thus, if your home is insured for a maximum of $100,000, your ALE coverage will total a maximum of $20,000. Additionally, most policies will limit coverage for a certain amount of time. For instance, a typical policy provides that your ALE will be covered for a maximum of 1 month.

When does your ALE coverage kick in?

Before you will be entitled to receive ALE, most policies require your dwelling to be “uninhabitable.” The specific requirement before your ALE coverage kicks in will depend on your specific policy, however, as a general matter, a home that does not have basic utilities like water, heat, or electricity will be considered to be “uninhabitable.” Once your ALE coverage kicks in, any expenses you have outside of those which you would normally incur will be covered to the extent of your policy limits.

What types of expenses are covered under the ALE coverage?

Most types of living expenses, above and beyond your ordinary living expenses that occur as a result of a covered event, will ordinarily be covered by ALE insurance. Common examples include: hotel costs, car rentals, pet boarding, furniture rentals, laundry expenses and even costs associated with increased miles getting to work, school or church, and restaurant meals can be covered if your kitchen is inaccessible.

However, because your insurance will only cover “additional” living expenses, your insurer will subtract the expenses you normally would have spent anyway. For instance, if you are claiming $1,000 in restaurant expenses as ALE because of a damaged kitchen, but in the same time span you normally would have spent $500 on food, then your insurer will cover you for the additional $500 above and beyond your normal expenses. If your home is, in fact, entirely uninhabitable, ALE insurance may cover your expenses for a comparable home.

How do you prove Additional Living Expenses?

You must be able to demonstrate your “normal” living expenses as well as your “additional” living expenses. Your normal living expenses can be determined by averaging out your expenses in certain categories. For example, you may be able to determine from bank statements or credit card statements that you’ve spent an average of $1000.00 a month in food over the last 6 months or a year. As to your “additional” expenses, receipts or statements will generally suffice. Remember, when it comes to proving losses, the insured carries the burden of proof.

Proper documentation will always make it more difficult for your insurer to deny your claim. Saving receipts and keeping logs of your expenses may be the easiest way to prove your ALE. Many insurers will provide you with a spreadsheet or log to make it easier for you to document your ALE. 

Are there any kinds of limitations on additional living expenses recoveries?

ALE are designed to make the insured whole, and not to put the insured in a better place than they were before the loss. Thus, a typical ALE provision will provide coverage for only those ALE that are “reasonably necessary” in view of your normal living expenses. Thus, a person that spends an average of $20 a meal cannot “reasonably” expect their insurer to cover a 5 star lobster dinner for the next two weeks. Furthermore, ALE must actually be incurred. If you stay with a relative and do not incur any extra lodging costs, then you did not sustant an ALE loss.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

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