If a fire, flood, or other massive damage makes your home unlivable, will your homeowners’ insurance cover hotel stays and other relocation expenses? Fortunately, most policies will cover temporary accommodations while your home gets fixed or rebuilt. However, it’s important to know what your insurer will and won’t cover and how they pay for your living expenses.
Read on to find out how your homeowners’ insurance may help you rest easier with temporary housing.
Does Homeowners Insurance Pay for Temporary Housing?
Standard homeowners’ insurance policies typically come with a provision known as additional living expense (ALE) coverage. It’s also referred to as alternate living expense coverage, loss of use coverage, or coverage D.
This coverage entitles you to hotel stays and other housing options if your home has been affected by a covered peril. For instance, if you want to pay a relative a reasonable rate for opening their home to your family, your policy may reimburse you.
What Does ALE Coverage Provide?
Additional living expenses coverage can reimburse you for certain expenses because you cannot live in your home. Your accommodations must match your usual lifestyle. Homeowners insurance will not cover hotel stays for power outages or other issues if you can safely remain in your residence.
Your coverage may provide for the following:
- a hotel stay, including laundry services
- restaurant meals if you don’t have access to a kitchen
- a comparable rental home/apartment, moving, furnishings, and utility expenses
- lost rent payments from the portion of your home used by a tenant
- storage for undamaged possessions, such as furniture
- replacement of clothes damaged during a covered loss
- pet boarding
- extra mileage if you now have a longer commute to work or school
Can You Get a Cash Advance?
Covered perils usually catch people unprepared to handle the immediate, mounting expenses of living away from home. Your policy may not mention cash advances for ALE costs, but some insurers offer money upfront to help. Ask your adjuster who may assist you with securing funds under your policy.
How Much Does Homeowners Insurance Pay for a Hotel?
Your homeowner’s policy should help you obtain lodging in a place comparable to your home’s space. High-end lodging or dining will not likely qualify unless the expenses match your current standard of living.
What Are the Limits of ALE Insurance Coverage?
ALE coverage does come with limits. However, this money does not affect what you may get from your home structure coverage. According to the International Risk Management Institute, coverage is normally limited to:
- 30% of the dwelling limit in HO-2, HO-3, AND HO-5 homeowners’ policies
- 10% of the dwelling limit in HO-8 policies
- 50% of the personal property limit in HO-6 condominium unit owners’ policies
- 30% of the personal property limit in HO-4 renters insurance policies
How Long Does ALE Coverage Last?
The period of restoration, which is the length of time you can use ALE coverage, varies among insurers. Policies often provide up to 12 months of coverage. Some companies offer up to 24 months of coverage or let you buy extra coverage.
Keep Track to Get Reimbursed
It can take months to repair your home or find a new living arrangement, especially in the case of widespread disaster. Check your policy for maximums that apply.
Record and submit receipts of all related purchases to ensure reimbursement. Also, get documented authorization before making any large purchases.
Consult the nonprofit, consumer-focused group United Policyholders for more resources about homeowners’ insurance claims.