When you suffer a dramatic loss, such as the devastation caused by Hurricane Ida, your first thought may be the need for ALE. We are not referring to your favorite brew. What we are talking about is additional living expense coverage.
Between 2018 to 2020 there were 50 weather and climate disasters in the U.S. The country set a record in 2020 with $22 billion-dollar climate and weather disaster costs. This includes 13 severe storms, 7 tropical cyclones, 1 drought, and 1 wildfire event.
Hurricane Ida has left behind destruction in Louisiana that will take months, likely years, to recover from. Even with proper insurance policies in place, homeowner’s insurance companies resist paying. You may find yourself with a legal battle on your hands.
During your time of recovery from the loss of your home and belongings, you may qualify for an additional living expense (ALE). This is a benefit of your homeowner’s insurance.
Following any type of storm, you need to make sure you follow proper steps to prevent delays in processing your homeowner’s insurance claim. This includes any evacuation-related receipts, including gas, food, and accommodations.
If you are unsure about ALE coverage or how to file an additional living expense coverage claim, keep reading to get answers to these and other important questions.
What Is Additional Living Expense Coverage?
ALE coverage is provided through your homeowner’s insurance policy. You can usually find the information under the “loss of use” section of your policy. The coverage pays the additional living expenses you incur when you are temporarily displaced from your residence.
The importance of ALE becomes apparent following a natural disaster. It will cover things such as the increase in your monthly food bill caused by needing to dine in restaurants rather than at home. Other costs include staying in alternative housing until your home is inhabitable again, and:
- Cost of using a laundry facility because you no longer can do laundry at home
- Furniture rental
- Storage costs
- Displacement or moving expenses
- Boarding of pets
- Security deposit on temporary housing
- Increased travel expenses to work because of your temporary housing location
- Insurance policy cost for insurance on contents of temporary housing
- Set-up fees for utilities at temporary housing location
- Costs for moving from temporary housing to repaired home
The insurance company will evaluate your additional living expense coverage claim to see how it compares with the cost of your normal lifestyle. The additional living expense coverage in homeowners insurance is designed to pay the difference between what you usually spend and what you must now pay because of not living in your home.
Additional living expense coverage will not pay for the structural damage to your home or loss of personal belongings. Those are items that you must file a claim for under other parts of your homeowner’s insurance policy. If you are struggling with receiving compensation from your insurance company, you need to contact a Hurricane Ida insurance lawyer for assistance.
While restaurant expenses are common with ALE claims, you need to confirm with your insurance adjuster what they consider to be a reasonable food expense. You also want to find out how reimbursements are handled.
An insurance company will not pay for expensive, fine dining in restaurants. You will receive what they consider a normal food allowance. Any amounts spent over that will come out of your pocket.
These same criteria are used for purchasing groceries. If you are in temporary housing that allows you to cook meals, your weekly or monthly expenditures should not exceed your normal spending prior to the disaster.
ALE Coverage for Temporary Evacuations
If your home does not suffer damage but your community is under a mandatory evacuation order, you may be able to obtain additional living expense coverage. For instance, if your community is required to evacuate due to a hurricane targeting your home, you may be able to receive ALE while you are under the evacuation order. If your home suffers no damage, your ALE will not cover expenses for any stays beyond the required evacuation date.
Flooding Coverage From Hurricane
One area that may not be covered is if your home suffers damage from flooding. You will need to review your flood coverage insurance to determine whether or not you can obtain ALE if your home suffers water damage during a hurricane.
Flood insurance is not legally required in Louisiana. Those who live in high flood risk areas may need it to qualify for a mortgage. Even if you are not in an area that requires flood insurance, it may be a financially good decision to purchase a policy.
Louisiana is the wettest state in the continental U.S., receiving 60 inches of rain per year. Twenty-five percent of flood insurance claims in the state are made by people who reside outside high-risk flood zones.
This is important information because if your house only suffers flooding from a hurricane, it may not have insurance coverage for damages. There is currently a Louisiana private flood insurance bill that has been returned to the House from the Senate. House Bill 577 will make it easier for private insurance companies to offer flood insurance in the state.
How to File an Additional Living Expense Coverage Claim
You can only file an ALE claim if your home becomes inhabitable following an event such as a fire or hurricane. Do not assume that because your home is destroyed by a hurricane that you will automatically receive ALE coverage.
If your home suffers damage that makes it unlivable, call your insurance company as soon as possible after the damage occurs. Keep a record of your calls, including date and time, who you spoke with, and what is said.
Your insurance adjuster will assist you in filing your claim. They can also provide assistance in finding temporary housing and explain what options are available to you.
Every insurance company has its own criteria for considering a home inhabitable. They must approve the coverage and expense before reimbursement is made. You also need to check with the insurance adjuster to see how long ALE will be paid while your home is under repair.
Keep in mind that, depending on the type of your homeowner’s policy, ALE coverage limits are:
- About 30% of the dwelling limit amount on a standard homeowners insurance policy
- About 50% of the personal property or insured contents on condo policies
- About 30% of personal property or contents in a tenant policy
To find out exactly what your policy covers, you need to review the declarations page of your homeowners’ insurance policy.
Get Your Maximum Additional Living Expense Coverage Benefit
To obtain the maximum additional living expense benefit available to you, it is important to save and provide your insurance company with receipts for all your expenses. You will need to document how these expenses are an increase from what costs were prior to losing the use of your home.
Provide the insurance company with proof of your normal expenses. This serves as a comparison point when explaining what the increase is in your costs. If there are any special expenses you receive authorization for, make sure you obtain that agreement in writing to prevent a future dispute.
When You Experience Insurance Coverage Problems
If you are having trouble obtaining your additional living expense coverage or any other claim coverage resulting from hurricane damage, call Babcock Partners LLC. We specialize in Hurricane Ida insurance coverage claims and will provide you with a free case review. You may contact us using our online form or call us at (225) 240-4053.