What should I do if my ALE coverage runs out and my house in Green Valley, AZ, is still not built?

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When a covered loss makes your residence uninhabitable or you are denied access to your home by an order from the government, some insurance companies will pay reasonable increases in your living expenses to uphold your normal standard of living. This coverage is termed ‘Additional Living Expense’ or ‘ALE.’ If your home insurance includes this coverage, this portion of your policy begins at the time of the loss. An independent agent can assist you in finding the best coverage for your home in Green Valley, Arizona.

ALE coverage is limited

However, under most homeowner policies ALE coverage is limited. Typically, there are three ways this limit is defined:

  1. Payment only continues for the least amount of time required to replace or repair the damage to your house.
  2. Until you permanently relocate.
  3. In Arizona, your policy will most likely stipulate a maximum number of 12 consecutive months or the least time it takes for your house to be repaired or re-built or the least amount of time it takes you’re household to settle somewhere else.

On average, the Additional Living Expense portion of a typical home insurance policy in Arizona pays up to 20 percent of your policy limit. Your insurance company usually continues paying these expenses until the time limit is reached, you permanently relocate or your home is repaired, re-built and habitable.

Disaster-related misplacement

If you receive the maximum ALE settlement allowed by your insurance company following a disaster-related temporary housing need and still require assistance, the Federal Emergency Management Agency (FEMA) may be able to help you. You need to write a letter to FEMA that indicates why you still need temporary housing. You must also provide them with documentation showing that you already used all of your Additional Living Expense benefits along with a plan for permanent housing.

If you are concerned about being misplaced, you may want to purchase a separate ‘loss-of-use’ policy. Some insurance companies offer a policy with an unlimited amount of expense coverage. However, there is still a time limit on these policies.

As your independent agent, we are happy to help you find the best coverage for your Green Valley, Arizona house. We can give you the details you need to ensure you choose the best coverage possible. Contact us today.