If a fire, burst pipe or other covered loss forces you out of your home, you'll suddenly face costs you never planned for: a hotel or rental, restaurant meals, a longer commute, maybe pet boarding. Additional living expenses (ALE), also called loss of use or Coverage D on a homeowners policy, helps pay those extra costs while your home is repaired or rebuilt. It's one of the most valuable and least understood parts of a policy. This guide explains how it works.
What ALE covers
ALE generally pays the increase in your living costs above what you normally spend, while your home is unlivable because of a covered loss. Common examples include:
- Temporary housing: hotel, short-term rental or apartment
- Extra food costs: the difference between restaurant or takeout meals and your normal grocery bill
- Higher transportation costs, such as extra mileage for a longer commute
- Laundry if you don't have access to machines
- Pet boarding
- Furniture rental for a temporary home
- Moving and storage costs
- Utility setup at a temporary residence
It's based on maintaining your normal standard of living. A family in a four-bedroom home is generally entitled to comparable temporary housing, not a cramped motel room, subject to policy terms.
What it generally doesn't cover
- Normal expenses you'd pay anyway, such as your mortgage payment, which you typically must keep paying
- Losses that aren't covered. If the damage isn't covered, for example flood damage under a homeowners policy without flood coverage, ALE generally won't apply.
- Planned moves, such as moving out for a renovation you chose
- Costs above your limit or time period
Fair rental value
If you rent out part of your home, such as a room or ADU, many policies include fair rental value coverage, which replaces lost rent while the rented space is unlivable after a covered loss.
Limits and time periods
Policies set ALE limits in different ways:
- A dollar limit, often a percentage of the dwelling limit (for example, 20% or 30%) on many homeowners forms
- A time limit, such as 12 or 24 months
- "Actual loss sustained" for a reasonable time, subject to policy terms
Check your declarations page and policy. See our declarations page guide. If your dwelling limit is too low, a percentage-based ALE limit may be too low as well. Our home insurance coverage worksheet helps you compare your ALE limit with your own estimate of monthly costs and rebuild time.
California rules after a state of emergency
California law adds protections for ALE after disasters. Under California Insurance Code §2060:
- Covered loss relating to a state of emergency: ALE coverage must last at least 24 months from the start of the loss, subject to other policy provisions. If you're acting in good faith and with reasonable diligence and run into delays beyond your control, such as permit delays, material shortages or a lack of contractors, the insurer must grant an extension of up to 12 more months, for a total of 36. Additional six-month extensions are provided for good cause.
- List of covered items: after an ALE claim, insurers must give you a list of items they believe may be covered as ALE.
- Evacuation orders: when a state of emergency comes with a civil authority order restricting access to your home because of a covered peril, ALE must be provided for at least two weeks, with two-week extensions for good cause, subject to policy provisions.
The California Department of Insurance summarizes these rules in its annual notice of significant California residential insurance laws and its residential insurance guide. Other states have different rules.
Civil authority coverage
Many homeowners policies include civil authority coverage, which pays ALE when a government order prohibits you from using your home because of direct damage to a neighboring property from a covered peril. It's often limited to a short period, such as two weeks. Read your policy.
Renters and condo owners
Renters (HO-4) and condo (HO-6) policies typically include loss of use coverage too. Renters often overlook it, but it can be crucial if a building fire forces tenants out. See our renters insurance page.
How to file an ALE claim
- Notify your insurer promptly and ask about ALE right away. Some insurers can advance funds.
- Ask what's covered. In California, ask for the insurer's list of covered ALE items.
- Get approval before signing a long lease, if possible.
- Track your normal expenses so you can show the increase. Keep past grocery and utility bills.
- Keep every receipt: lodging, meals, mileage, laundry, pet boarding and storage.
- Submit regularly, often monthly, rather than waiting until the end.
- Communicate delays in writing. If permits or contractors slow your rebuild, document it to support an extension.
Keep a simple spreadsheet with columns for date, expense, amount, normal cost and the difference. See our claim rights and deadlines guide.
If your ALE claim is disputed
Ask for the specific policy language behind any denial, provide documentation, and escalate. See our claim denied appeal guide. California consumers can contact the CDI hotline at (800) 927-4357.
Additional living expenses checklist
- ☐ Find your ALE limit and any time limit on your declarations page
- ☐ Check whether your ALE is a percentage of your dwelling limit
- ☐ Estimate temporary housing costs in your area
- ☐ Keep records of your normal monthly expenses
- ☐ After a loss, ask about advances and the list of covered items
- ☐ Keep receipts and submit claims regularly
- ☐ Document any rebuild delays
Contact Alishahi Insurance or call (877) 711-4545 to review your loss of use coverage.
Frequently asked questions
What does additional living expenses coverage pay for?
The increase in living costs while your home is unlivable after a covered loss, such as temporary housing, extra food costs, mileage, laundry and pet boarding.
How long does ALE last in California after a disaster?
For a covered loss relating to a state of emergency, at least 24 months, with extensions of up to 12 more months for delays beyond your control, and further six-month extensions for good cause.
Does ALE pay my mortgage?
Generally no. ALE pays the increase in living costs. You typically keep paying your mortgage.
Do renters have loss of use coverage?
Renters policies typically include loss of use coverage if a covered loss makes the unit unlivable.
What records do I need for an ALE claim?
Receipts for all extra expenses and records of your normal costs, so you can show the increase.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.