What kind of loss is covered by Additional Living Expense Insurance?

Additional Living Expense Insurance is specifically designed to cover the costs associated with living in temporary accommodations when a policyholder's residence becomes uninhabitable due to a covered loss, such as a fire or severe damage from a storm. This type of insurance helps protect individuals from the financial strain of having to pay for both their original housing and the temporary housing simultaneously.

When a homeowners or renters policy has to cover repairs or replacement of the primary home following such an event, the insured may find themselves needing to rent a hotel or another house, which can lead to significant additional costs. The insurance thus ensures that the policyholder can maintain their standard of living while their permanent home is being restored, making it a critical part of comprehensive homeowners or renters coverage.