When you purchase a homeowner's insurance policy from a company like Angel Auto Insurance, you should ask the agent if the policy comes with additional living expenses (ALE) coverage. ALE coverage is usually included with a standard homeowner's insurance policy, but the actual way ALE coverage works can vary from one policy to another. Here are several things you should know about this type of coverage.
What is it for?
ALE is a type of coverage typically included with home insurance policies because it is often an essential coverage a homeowner would need if major damage occurred to the person's house. With ALE, you have coverage that pays for living expenses you would have to pay if you were forced to move out of your house after damage occurred.
For example, if a fire destroys your home, you would have to continue paying your mortgage payments, plus you would have to pay rent to live somewhere else while your house was being rebuilt. ALE coverage helps in a situation like this by compensating you for the extra expenses you would incur from having to live somewhere else.
How much coverage does it offer?
You can choose the amount of coverage you want for ALE, but most agents recommend having coverage that is equal to around 20% of the coverage you have for the structure of your house. For example, if you have $200,000 of coverage for your home, your ALE coverage should be at $40,000. This amount would have to cover all the expenses you would have while living away from home, including rent and necessities you need to purchase right away, such as personal hygiene products.
Are there any exclusions?
There are some exclusions and things you should know about with ALE coverage. One of these is that there is usually a time limitation. For example, your policy might only give you coverage for 12 months if your house was destroyed. In this case, you would have to make sure you rebuilt it within this time frame.
You should also realize that if your house was destroyed by something that your homeowner's policy did not cover, your ALE coverage would not be valid. For example, if you did not have flood insurance and your home was destroyed by a flood, you would have no ALE coverage if you were forced to move out of your house.
Having ALE coverage is a necessity if you own a home, and you should make sure your policy includes this type of coverage and a sufficient amount of this coverage. To learn more about this, contact a local insurance agency today.