Hurricanes, cyclones and typhoons are among the most devastating natural disasters. The U.S. averages up to 10 named storms per year, with some seasons seeing as many as 20 storms. Although there’s no way to know if a particular area will be hit by a hurricane during any given season, it’s worth considering whether or not you have the right level of additional living expense (ALE) insurance coverage before hurricane season begins in June. Read on to learn more about how ALE policies can protect you from unexpected financial stress in the event that a natural disaster forces relocation.
What is ALE Insurance?
ALE is a type of additional living expenses (ALE) insurance often included in homeowner’s policies that pays you a benefit if a natural disaster impacts your ability to remain home. This type of policy is designed to help you cover extra costs associated with your living expenses while having to relocate as a result of the disaster. Many standard policies also include a certain amount of additional living expenses (ALE) coverage, but most only provide a relatively small amount.
How Does ALE Insurance Work?
Like any other insurance policy, ALE policies are designed to help you avoid or minimize financial hardship that might result from a particular event, like a natural disaster. Like all insurance, you purchase an ALE policy from a reputable insurance company, and they agree to honor the terms of the policy in exchange for your premium payment. You can buy an ALE policy as a stand-alone policy, as part of a larger policy such as an extended disability (long-term) insurance policy, or as part of a business owner’s policy that also covers property and liability insurance. If a natural disaster occurs and you are forced to relocate, you can file a claim and the insurance company will pay you a benefit. The amount of the payment will vary depending on the type of policy you have, the company you’re insured with, and the specific terms of your policy.
How Much Does ALE Coverage Cost?
Like all insurance policies, the cost of an ALE policy varies depending on the type of policy you’re looking for and the company you choose to insure with.
If you want to add ALE coverage to your existing policy, you’ll want to check with your insurance company to see if they offer this as an option. If they do, you can add additional living expense coverage to your existing policy without having to apply for a new policy.
ALE insurance is typically set at 20% of your dwelling coverage. So if your house is insured for $300,000, for example, your policy may have $60,000 for additional living expenses. If you feel that’s not enough to maintain your standard of living if you can’t live at home, talk to your insurer about increasing your ALE limit.
When Should You Buy Additional Living Expense Insurance?
- If you don’t have the right amount of additional living expense coverage in your current insurance policy, you should strongly consider adding a stand-alone ALE policy to your existing policy.
- If you’re currently insured with an extended an ALE policy but don’t have enough coverage, you should consider increasing your coverage.
- If you live in an area prone to natural disasters, from hurricanes, flooding, and fires.
- If you are required to evacuate even if your home is undamaged.
What may Covered by ALE?
- Lodging costs
- Restaurant meals
- Replacement clothing
- Laundry service
- Pet boarding
- Storage
- Furniture rental
Bottom Line
Hurricanes, cyclones, and typhoons are among the most devastating and costly natural disasters, and they can occur in any part of the world. While it’s impossible to predict if and when a particular area will be hit by a hurricane, it’s worth considering whether you have the right level of additional living expense (ALE) insurance coverage before hurricane season begins in June.
How can Capri help?
When you are faced with having to leave home unexpectedly, Capri is here for you. Remodeling or rebuilding a home so that it is habitable can often take months after events like the ever more frequent natural disasters. For the cost of hotel rooms, corporate housing provides fully furnished apartments that provide more space for distressed families while they are putting their homes and often their lives back together.