Additional living expenses: examples and how to track them

When a fire, storm or water damage makes your home unlivable, the bills do not stop. Many homeowners and renters policies include loss of use coverage, often called additional living expenses (ALE), to pay the extra cost of living elsewhere. This article explains what that usually means, gives common examples and shows how to keep receipts organized.

What ALE usually covers

In the standard ISO homeowners form (HO 00 03, 2011 edition), additional living expense applies when a covered loss makes the part of the residence where you live not fit to live in. It covers any necessary increase in living expenses so your household can maintain its normal standard of living, for the shortest time required to repair or replace the damage or, if you permanently relocate, the shortest time for your household to settle elsewhere. These periods are not cut off just because the policy term ends. If a civil authority prohibits use of your home because of damage to neighboring premises by a covered peril, the standard form provides loss of use for no more than two weeks. Your own policy may differ, and some policies limit ALE by a dollar amount, a time period or both.

The key idea: the increase over normal

ALE generally pays the difference between what you spend now and what you would normally have spent. United Policyholders, a non-profit, offers a useful test: is this an expense you incurred because of the loss? A mortgage payment you would make anyway is not; a temporary rental usually is.

Common examples

Expense	Notes
Temporary rent or hotel (ask whether deposits are covered)	Usually the core of living expense claims
Extra mileage	Longer commute, school runs, trips to the property; use the rate your insurer applies
Utility setup or reconnection fees	At the temporary home
Pet boarding	If pets cannot stay with you
Moving and storage	Including moving back
Food and laundry above normal	Only the increase over your usual spending

United Policyholders reports that survivors have been reimbursed for temporary rent, extra mileage, utility setup fees, extra phone charges, pet boarding and moving back, and that insurers may disagree on some items. Whether each one is paid depends on your policy and your insurer.

How to track ALE

1. Write down your normal monthly costs before the loss: housing, utilities, groceries, commute, phone and internet, laundry.
2. Log each receipt the day you pay it, with the category, vendor and amount, and the part you would have paid anyway.
3. Submit receipts regularly, with a cover letter, and note the date and method.
4. Record each reimbursement and follow up on anything waiting more than about 30 days.
5. Keep a monthly summary of what you claimed, what was paid and what is not yet reimbursed.

One survivor tip published by United Policyholders: sort receipts into three buckets, living expenses, belongings and repairs (construction).

Ask before big commitments

Before signing a lease or booking a long stay, ask your insurer in writing what it will consider: the limit, any time limit, which categories it reimburses, how to submit receipts, whether an advance is available, and the date it currently expects payments to end. Record the answer and the end date, and if repairs are delayed, request more time in writing well before that date.

Rules after a disaster in some states

In California, for a covered loss related to a state of emergency, living expense coverage must last at least 24 months from the start of the loss, plus up to 12 more months if good-faith delays are beyond your control, subject to the policy's other terms including its dollar limit (Ins. Code 2060), and after a total loss of a primary residence in a state of emergency, the insurer must advance at least four months of living expenses on request (Ins. Code 2061). In Colorado, after a total loss of an owner-occupied home in a governor-declared wildfire disaster, living expense coverage must last at least 24 months, with two 6-month extensions if delays beyond your control occur despite good faith and reasonable diligence (C.R.S. 10-4-110.8).

Putting it together

The Additional Living Expenses (ALE) Tracker Kit turns these steps into ready-to-use files, with nothing pre-filled that should come from your records, your policy or your insurer:

• US_ALE_Tracker_User_Guide.docx: step-by-step user guide with key terms, rules that may apply, sources and a final checklist.
• US_ALE_Tracker_ALE_TRACKER.xlsx: additional living expenses tracker: receipts, extra cost, reimbursed, not yet reimbursed, monthly summary, mileage.
• US_ALE_Tracker_Claim_Diary_TRACKER.xlsx: claim diary: key dates with alerts, contact log, documents sent, payments received.
• US_ALE_Tracker_Claim_Letters_TEMPLATE.docx: editable letters to request documents, information or time, to send documents, and to confirm conversations in writing.

Fill in the setup tab from your policy and your insurer's letter, log receipts daily, submit them with the cover letter and log reimbursements. The diary keeps calls and letters, and the end date turns amber at 30 days.

Quick checklist

• Living expense limit, time limit and end date confirmed in writing.
• Normal monthly costs entered.
• Every receipt logged the day it was paid.
• Receipts submitted at least monthly with a cover letter.
• Reimbursements logged; nothing waiting more than 30 days without follow-up.
• Extension requested in writing before the end date, if needed.

General information, not legal or insurance advice. Your policy decides what is covered.