Additional Living Expense

Published: | Updated: September 2, 2015

Definition - What does Additional Living Expense mean?

Additional living expense coverage is extra coverage found in some homeowners' and renters' insurance policies. It pays for the extra costs that an insured has to deal with if they temporarily need to move out of their home. For example, if a fire burns down an insured’s house, they would need to stay in a hotel and eat meals at restaurants until their house is rebuilt.

Insuranceopedia explains Additional Living Expense

Additional living expense coverage is usually capped at a set percentage of the total property coverage, like 10 or 20 percent. For example, if the insured has $100,000 of property coverage and a 10 percent limit for additional living expenses, this coverage would pay up to $10,000 for extra living expenses while the home is being repaired.

Moreover, it also only pays the extra living expenses that an insured incurs beyond what they normally would have paid while living at home. It doesn’t pay all their living expenses. If an insured spends $2,000 a month to live at home, additional living expense coverage would only pay any expenses over $2,000 a month while the insured is unable to stay in the home.

This definition was written in the context of insurance

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