When Does ALE Coverage Normally Kick In?

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

If your rental unit suddenly becomes unlivable, the cost of staying somewhere else can add up quickly. Additional living expense coverage, often shortened to ALE, is the part of a tenant insurance policy that helps cover these emergency expenses. Understanding when it might apply, and when it possibly couldn’t, can help you quickly understand what you may or may not be covered for in an emergency. 

What Is ALE Coverage?

ALE coverage refers to the portion of a tenant insurance policy tied to the added cost of living somewhere else temporarily, when a rented unit becomes unsafe or otherwise unusable following a covered event. It tends to relate specifically to extra expenses you’re facing because of the displacement itself, rather than costs a renter would normally have to pay. 

This distinguishes it from other parts of a tenant policy. Where, on a top level, personal property coverage tends to relate to belongings that were damaged, and liability coverage tends to relate to harm experienced by others and your legal financial support, ALE coverage is designed around the disruption to daily living that follows an incident.

What triggers ALE coverage to start?

This kind of coverage is usually connected to a unit becoming uninhabitable, or significantly limited in normal use, as a direct result of a covered peril. The trigger tends to have less to do with the cause on its own, and more to do with whether the unit can reasonably still be lived in while repairs or restoration take place.

There’s normally a few factors which have to be assessed in a unit: whether utilities are functioning, whether the space is safe to occupy, and whether the extent of the damage makes day-to-day living reasonably possible. A unit with minor, contained damage might not meet this threshold, even if repairs are still needed.

Perils that normally qualify

There’s no guaranteed event that will qualify for ALE coverage. However, some common examples of scenarios where it may apply are: 

• Fire or smoke damage significant enough to affect whether the unit can be lived in

• Water damage tied to a sudden, accidental event, such as a burst pipe

• Wind or storm damage affecting the structure of the unit

• Other sudden, unexpected events already recognized as covered perils elsewhere in the policy

• Mandatory evacuation, if you’re issued to vacate your premises by a government alert

In reality, the common factor being decided on is less about what specifically happened and more about the practical outcome of whether a space can no longer reasonably be occupied.

Perils that often don’t qualify

Again, each situation is assessed individually. But certain situations tend to fall outside this type of coverage:

• Damage connected to gradual wear and tear rather than a sudden event

• Situations where the unit remains livable despite some damage having occurred

• Events already excluded elsewhere in the policy, such as certain water sources or intentional acts

• A voluntary decision to relocate that isn't connected to a covered event

Not all events are covered as part of your tenant policy, even if you can no longer live in your unit after it’s damaged. It's worth reviewing what is and isn't included in your specific policy. 

How long can coverage last?

The length of your ALE coverage could be either the amount of time it takes to repair or restore your unit, or a limit set within the policy itself. Usually, it’s whichever is reached first. Because repair timelines can vary considerably depending on the extent of the damage and other circumstances, there isn't a consistent timeframe.

Getting a claim started

• Letting an insurer know. Contact your insurer or insurance broker as soon as you feel the unit has become uninhabitable. This initial contact typically includes an explanation of what happened and why the unit currently cannot be lived in.

• Documentation collection. Gather evidence for costs tied to your temporary accommodation, such as a hotel or short-term rental, along with receipts for meals or other related daily expenses incurred as a result of the displacement. Records connected to the original incident, such as photos or reports, can also be kept as supporting evidence.

• Claim review. Your insurer reviews the submitted claim and accompanying documentation to work out if it falls within the scope of ALE coverage. The insurer then applies the relevant policy terms to the specific circumstances of the situation.

• Ongoing communication. As repairs to the unit are happening, you and your insurer will normally stay in communication throughout the process. This ongoing contact helps track the expected duration of displacement and any changes relevant to the claim.

Every insurance provider will have their own system for processing a claim. When you first get in contact, make sure to ask about reasonable timeframes and steps to expect as part of your exact situation. 

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.