Unexpected events such as fires, natural disasters, or water damage can leave your home temporarily unlivable. In these situations, additional living expenses (ALE) coverage can help. Typically included in standard home insurance policies, ALE coverage pays for temporary housing and other necessary expenses while your home is being repaired. Emergencies can disrupt daily life and create sudden financial stress, but ALE coverage ensures you’re not left to face the burden alone. In this guide, we’ll explain what ALE is and how it works.

What is additional living expenses coverage?
If your home becomes unlivable due to damage from a covered peril and you need to move out during repairs, your insurance provider will cover the increased living expenses you incur. This coverage lasts for a reasonable period of time needed to repair or rebuild your home, or, if you relocate permanently, to settle into a new place.

What does additional living expenses coverage include?
If a covered peril forces you out of your home, your insurance may cover additional living expenses beyond your normal living expenses, such as:
 

1. Temporary housing. Hotels, rentals, or apartments while your home is being repaired.
2. Restaurant meals. Extra expenses if you need to eat out because you can’t cook at your temporary home.
3. Laundry. Laundromat expenses if you can’t use your own appliances.
4. Transportation. Extra commuting expenses, like parking or transit, if your temporary home is farther away.
5. Storage. Fees to store belongings while your home is being repaired.
6. Pet boarding. Expenses to board pets if they can’t stay with you in your temporary home.
7. Utility reconnection. Deposits or connection fees for utilities at your temporary home.

What does additional living expenses coverage not include?
While ALE coverage helps with many things, it typically doesn’t cover:
 

1. Mortgage payments or regular rent. You’re still responsible for your usual housing expenses, even if you can’t live at home.
2. Luxury expenses. ALE coverage is meant to maintain your standard of living, not upgrade it. Pricey accommodations may be partially reimbursed or denied entirely.
3. Home repairs. These are covered separately under the dwelling portion of your home insurance policy, not ALE coverage.
4. Expenses before claim approval. Confirm with your insurance representative before making major purchases or commitments for accommodations.

How much coverage do you have?
Home insurance policies set limits on ALE coverage, which may include:
 

• A percentage of your home coverage. Usually around 20-30%, but it can range from 10-50% depending on your policy and insurance provider. This percentage-based approach scales your coverage with your home’s value and the duration of your displacement.
• A maximum amount. Some policies set a fixed dollar limit, while others offer unlimited ALE coverage, but that’s less common. Understanding this limit can help you budget for temporary housing costs.
• A time limit. Your coverage lasts for the “reasonable time” needed to repair or rebuild your home, based on the severity of the damage and local conditions.

Policies may combine these limits, but your insurance provider should clarify your exact ALE coverage details.

Understanding additional living expenses coverage can help prepare you for the unexpected. If you're a current OTIP policyholder, contact us at 1-833-494-0090 to review your existing home insurance policy. If you're not insured with OTIP and are shopping for home insurance, call us at 1-888-892-4935 to get a quote and receive a $20 gift card of your choice!