What is Additional Living Expense (ALE) Coverage and Why Do You Need It?

What if you suddenly weren’t able to live in the home you love? Most renters don’t plan for disaster scenarios like this. The sad reality is, without additional living expense (ALE) coverage as part of your tenant insurance policy, you could find yourself needing to pay for temporary accommodation completely out of pocket.

Water damage, fire, and natural disasters can all strike without warning. And, even if your home can be salvaged well enough for you to eventually move back in, the short-term cost of moving can quickly add up. Hotels, meals, and even finding somewhere for pets to live can reach into the thousands after just a couple of weeks away from home. 

ALE coverage exists to support you financially in these exact kinds of situations. In this guide, we’re going to take a closer look at everything you need to know about ALE coverage. From what it does and doesn’t cover, to how much you might be able to claim back, read on to learn why having this kind of coverage could make a difference in an emergency.

What is additional living expense coverage?

ALE coverage (sometimes also called additional living expense insurance) is the part of an insurance policy which covers the cost of living if you’re temporarily displaced from your permanent place of residence by a covered peril or event. In practice, it helps to pay for most of the fees and costs you might face as part of any relocation process, making it easier for you to manage what is likely to be an expensive period. 

What does additional living expense coverage include?

ALE coverage is set up to help you when you’re forced to leave your home as part of a covered event. But it doesn’t just pay for temporary accommodation. Here’s everything which might be included as part of ALE coverage in a tenant insurance policy: 

• Temporary housing costs. First and foremost, ALE insurance provides financial support for costs associated with finding a temporary home. This could be anything from a short stay in a hotel, to a longer period in properly furnished rented accommodation. 

• Transportation. If your temporary housing situation means you have to pay more for commuting, parking, or using public transportation, this might also be covered under the ALE part of your insurance policy. 

• Meals. If your temporary living situation means you can’t reasonably cook meals for yourself, you could also be covered for the cost of having to eat out. If you can prepare meals at your temporary accommodation, this won’t apply. 

• Storage fees. If you have salvageable possessions which you need to keep safe, storage locker fees might also be included as part of your ALE coverage for your displacement period. 

• Laundry. You might be eligible for coverage if you’re forced to use a public laundromat as part of your new daily routine. This could again depend on whether or not you have a washer and dryer at home, or if it’s an expense you’re used to paying (for example, if you live in a high-rise apartment with a communal washing machine room). 

• Pet boarding. If your pets aren’t allowed to stay with you, you may have to board them. This is another area where ALE coverage could support you – especially if it’s for a long stay, where costs can start to mount quickly. 

• Utility reconnection fees. One-time expenses, such as sign-up fees which allow you to connect to necessities like internet, electricity, and water, may also be covered. 

Remember, every insurance provider is different. There may be some expenses which aren’t universal, so be sure to understand what does or doesn’t apply to your exact policy. 

What isn’t covered by additional living expense coverage?

ALE coverage won’t apply to every situation when you’re forced to relocate. Here are some common exclusions: 

• Your usual expenses. The key factor is in the name: “additional” living expenses. That means if you get displaced, and normally pay a rent of $2,000, this amount will be taken off any payment you receive, even if your claim is successful. This is true across all your bills and expenses which carry over between accommodations. 

• Uninsured events. Not every event or peril is insured. This is something which can change on a provider-by-provider basis. Make sure to fully understand what is or isn’t considered an insured event before you sign up for any kind of ALE coverage. Earthquakes and floods are examples of events which aren’t always covered as part of a basic policy – although you may be able to enhance your coverage to include them.

• A vacant property. For coverage to apply, a tenant has to be living in the property which was affected. That doesn’t necessarily mean you have to be in the home when something happens. It just needs to be your main place of residence. 

• Normal wear and tear. Regular maintenance, or gradual wear and tear which need to be repaired, may also not be covered. ALE supports with sudden or unexpected events, rather than drawn out issues which have reached a breaking point.

• Preventable loss. If it’s determined that you could have taken steps to prevent or minimise the need for additional living expenses, this could impact a claim. For example, leaving windows open during a heavy storm. 

• Voluntary displacement. If you choose to leave your home, even though it’s been deemed habitable by your provider, you won’t be able to get any financial support from ALE coverage. 

• Illegal activities. If you were engaging in any illegal practices which led to the need to make a claim, you will be denied. 

• Government action. Sometimes a policy might not cover you if you were displaced as a result of government action. That might be because of something like condemnation of the home, or other regulatory action. 

What kinds of events are covered by additional living expense coverage?

When it comes to the exact scenarios where ALE coverage might kick in, it all depends on what is considered a covered event or insured peril as part of your tenant insurance policy. Common scenarios are any circumstances where your home becomes uninhabitable (such as after a fire or extensive water damage from a leaky pipe), or if you’re forced to suddenly evacuate without warning (during a wildfire). 

At APOLLO, we extend ALE to situations where home is unlivable even if not directly impacted by a covered peril, such as an elevator outage caused by a fire in a lower floor making your top floor apartment uninhabitable. However, this may not be the case for every provider. Always make sure to check the terms and conditions of your policy to understand what kinds of events apply to your agreement. 

How much might I get paid by additional living expense coverage?

If you make a claim and are successful, the amount you receive will depend on a number of factors: 

• Your coverage limits

• How much your expenses exceeded your natural spending 

• How long you were displaced for 

• Your deductible amount 

With a lot of variables in play, every ALE situation tends to be very different, even if claims appear similar on the surface. Here are some examples of recent ALE coverage claims we’ve processed in 2026 alone:

• $5,437 paid to a renter after water damaged their apartment

• $3,000 for a tenant whose home was impacted by mold after water damage

• $4,917 after damage to flooring forced tenants to temporarily relocate 

APOLLO data based on ALE claims reported between January 1, 2026 and March 31, 2026

How much additional living expense coverage will I need?

The amount of coverage you need will depend on your exact circumstances. One way to understand what this might look like is by seeing how a payout is calculated in a hypothetical example, and comparing that with your regular monthly expenses: 

You’re displaced as a result of a fire in your home, and you know it’s going to take two months before you can move back in. It takes you two weeks to find rented accommodation, during which time you’ve had to stay at a hotel. When you do move, you have to pay two full months of rent (even if you don’t live there for the first couple of weeks). You also have no ability to cook for yourself, and need to use a communal laundromat. You also find yourself an extra 30-minutes away from your office. 

This would give a total expense of $7,800 across the two month period. But this is just half the story. It’s important to remember you will only be reimbursed for the amount which you had to spend above your normal living expenses – not the total amount. 

Using our above example, let’s compare these displacement costs with a hypothetical set of regular monthly expenses: 

Total ALE Coverage payout: $7,800 - $3,650 = $4,150

In this made-up scenario, a renter would receive a total of $4,150 in ALE coverage, minus whatever their deductible amount is. That’s because this represents the difference between the total displacement cost and the normal expenses someone might have to pay across a two-month period. Your deductible is the total you agreed to pay in order for funds to be released when you signed up for a policy. 

In this instance, it looks as though $5,000 ALE coverage might be enough. That’s a normal coverage amount, which a lot of renters opt for.

However, it’s also good to be covered for more than you think you might need. You could always be displaced for a lot longer than two months. While every situation is different, $10,000 is a commonly selected amount of protection if you have a larger family, or pets who need boarding.

If you’re still not sure what amount of ALE coverage works best for you, here’s a breakdown of what APOLLO customers chose as their ALE limits across the past year:

Internal APOLLO data based on chosen ALE limits on tenant insurance policies purchased between May 1, 2025 and April 30, 2026

What works for one doesn’t always work for all. It’s still important to think about your specific circumstances, and decide if a higher coverage amount works for you. Just remember, the more you’re covered for, the higher your premiums will be. 

Disclaimer: You can never know exactly what your payout might look like when making an ALE claim. It all comes down to how successful your claim is, as well as how long your displacement lasts.

What to know when submitting an additional living expense claim

If you do find yourself in the unfortunate situation where you need to make an ALE claim, it’s important to keep all of following in mind when submitting a claim:

• Notifying your insurance company. As soon as your home is no longer habitable, reach out to your insurance provider. A lot of policies ask for prompt notification, so try not to delay. It also means, in the event of a successful claim, you could receive your payout faster. For example, at APOLLO, our ALE coverage will kick in automatically following an evacuation order – meaning your claim is handled immediately. 

• Keep detailed records. Having records of every expense you incurred relating to your temporary relocation is also important. They make filing a claim easier for both you and an insurer. Always keep track of things like accommodation expenses, meals, transportation and storage costs. 

• Understand policy limits. The more you understand about your tenant insurance policy, the better. That extends beyond just ALE coverage. Make sure you understand what your coverage limits are. Knowing this can help you stay within them to the best of your abilities. 

• Mitigate what expenses you can. Your standards of living shouldn’t drop when receiving ALE coverage, but it is important to remember any payouts are designed to help maintain your quality of life, not improve it. All expenses should be necessary and reasonable. If they aren’t, it could impact the chances of your claim being successful. 

• Keep in contact with your insurance provider. Try to stay in regular contact with your provider throughout the process. They should be able to answer questions and clarify any concerns or queries you may have. 

Keep this all in mind when going through the claims process to make things as quick and easy as possible. 

When will you get reimbursed for an additional living expense claim?

Most of the time, ALE works on a reimbursement basis. That means you might have to pay for expenses upfront, with money paid back to you after a claim is successful. That could look like a month-to-month reimbursement, or one large lump sum after your claims period has ended. This will again be different depending on your provider. 

If you’re worried about affording costs upfront, you may be able to ask your insurer for an advanced payment. If they’re willing to give it to you, this will either be taken off the total amount you’re paid out, or something you’re asked to pay back if your claim is not successful. 

Additional living expense FAQs

Are their policy limits for ALE coverage?

Yes, just as with most aspects of a tenant insurance policy, you’ll only be able to receive ALE coverage for a certain amount. The good news is that this can be quite a high number – with renters often able to be covered for $10,000 or more. 

How long does ALE coverage last for?

Your coverage will last for the entirety of the time you’re displaced, or until you reach your coverage limit. That means that as long as your limit is high enough, you should always be covered for any additional living expenses, assuming your claim is successful. 

Is ALE coverage mandatory?

ALE is not mandatory by law, but it’s often a basic inclusion in most tenant insurance policies. While optional, ALE coverage provides immense value to renters, making it a wise choice for those looking to financially protect themselves. 

Do I have to pay for any expenses exceeding my ALE coverage amount?

Yes, if you exceed your coverage amount, you’ll have to cover the cost of anything over this figure. That’s why it’s always a good idea to get covered for as much as possible, in order to safeguard against this potential reality. 

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