When ALE Coverage Doesn't Apply: 4 Exclusions Worth Knowing

This guide is part of our series on ALE coverage and tenant insurance. 

If your home becomes unlivable, the additional living expense (ALE) part of a tenant insurance policy will often kick-in to help support you. 

But not every added cost tied to a disruption is treated the same way, though, and a few situations tend to fall outside what this type of coverage is generally considered to apply to. Let’s take a closer look at four such circumstances where you may not be supported by ALE coverage. 

1. Situations not tied to a covered event

ALE coverage might not apply if a displacement stems from an uninsured peril. Specific uninsured events will vary between providers, but it’s possible for things like earthquakes and floods to not be included as part of your tenant insurance coverage, unless you add them as upgrades. In essence, if your base tenant insurance doesn’t cover an event, ALE coverage also won’t. 

2. Upgrades and lifestyle increases

Your temporary accommodation is usually judged against what's reasonably similar to how someone normally lives. It’s not supposed to be a chance to move somewhere nicer, bigger, or in a better location. If a renter opts for something well beyond that comparable standard, the extra cost tied to that upgrade can be treated differently from an accommodation that keeps their standard of living roughly the same.

3. Costs beyond policy limits or time caps

Coverage here usually comes with limits built into the policy. That could be a dollar cap, a time limit, or both. Once a claim hits one of those thresholds, costs beyond that point often stop being considered part of the claim, even if the displacement itself hasn't ended.

4. Normal living expenses you'd have anyway

Expenses a renter would've faced regardless – like rent or subscriptions they're already paying – are usually treated differently from costs that only exist because of the disruption. The key question tends to be whether something is truly a new, additional expense, or just part of what someone was already paying for.

What to check in your policy

Some details vary from one tenant policy to the next, and those differences often determine how these exclusions actually play out. Think about checking how the policy defines a covered peril, what dollar or time limits apply specifically to ALE, and how "reasonably comparable" accommodation is worded in that policy. Since these details differ, how an exclusion applies in any given case usually comes down to the specific policy language rather than a single rule that applies everywhere.

The information provided on this page is intended for general educational purposes only and does not constitute insurance advice, a recommendation, or an offer to sell insurance. Every individual's insurance needs are unique and depend on personal circumstances. We encourage you to consult with an independent licensed insurance broker in your province who can assess your specific situation and recommend appropriate coverage.