What is Loss of Use Coverage and How Does It Work?

Learn about loss of use coverage in home insurance, also known as additional living expenses.
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Loss of use coverage, also known as additional living expenses (ALE), is a standard part of home insurance policies in Canada. And yet, most people don’t really think about it when they think of home insurance.
Loss of use reimburses the policyholder for extra costs they incur while they can’t use their insured property after a loss. In home insurance, that means the costs you’ll need to pay if your home gets damaged by an insured loss, like a fire. If you have to move out during repairs, your living costs will go up - loss of use coverage will help you out with those extra costs.
But it’s not just when your home is physically damaged. If you’re ordered to evacuate due to an event that your policy would cover, like a wildfire, you can use your loss of use coverage to cover the extra expenses even if your home remains undamaged.
Loss of use in home insurance covers things like hotel rooms, restaurant meals, taxis, or any other expenses you need while you’re forced to be out of your home. But, it only covers extra expenses, meaning those over and above your typical living costs. So if you normally spend $500 per month on food, but $1,000 per month while you’re away from home, loss of use would only cover the additional $500. It will also only cover costs up to the coverage limit, which varies from policy to policy.
If you need to make a loss of use claim, make sure to speak with your insurance provider. They’ll explain what you’ll need to do to make the process as painless as possible.
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00:00 Intro
00:21 What is loss of use coverage?
01:10 What are Additional Living Expenses?
02:22 ALE coverage limitations
03:29 What does ALE cover?
04:41 What does ALE not cover?
05:51 How do you claim ALE?
#LossOfUse #LossOfUseClaim #LossOfUseInsurance #HomeInsurance #AdditionalLivingExpenses #LossOfUseExplained