When a covered loss makes your home uninhabitable, your homeowners policy's loss of use coverage pays for temporary housing and other necessary additional living expenses. Most policyholders significantly underuse this coverage.
Loss of use pays for the necessary increase in your living expenses resulting from the covered loss. This includes hotel or rental housing, meals above your normal food budget, laundry, storage, pet boarding, and other reasonable costs incurred specifically because of the displacement.
Loss of use is typically expressed as a percentage of your Coverage A limit — commonly 20-30%. So if your home is insured for $500,000, you may have $100,000-$150,000 in loss of use coverage. This applies to total additional living expenses and continues until your home is repaired, subject to the limit.
Keep every receipt. Hotel bills, restaurant receipts, grocery receipts, laundry, mileage logs. Submit ALE claims monthly so your insurer processes them in real time. Request an ALE advance payment if you need funds immediately to secure temporary housing.
Common ALE disputes include rental reimbursement below fair market rates, disputed duration based on optimistic repair timelines, and denial of costs characterized as not necessary. If your ALE claim is being underpaid, obtain a written explanation and escalate to the New York insurance department if necessary.
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Regulatory resource: New York Department of Financial Services — https://www.dfs.ny.gov. The Insurance Professor provides education only — not legal or insurance advice.