ADDITIONAL LIVING EXPENSE INSURANCE Meaning and
Definition
-
Additional living expense insurance is a type of coverage provided by insurance companies to protect policyholders against financial losses incurred as a result of temporary displacement from their primary residence due to an insured event, typically fire or natural disaster. This insurance is designed to help policyholders cover the cost of living expenses that exceed their normal daily expenditures while they are unable to inhabit their home.
In the event of a covered loss, additional living expense insurance typically kicks in to assist with expenses such as temporary accommodation, rental fees, hotel expenses, and increased transportation costs. The purpose of this coverage is to ensure that policyholders can maintain a similar standard of living as before the insured event occurred, even if they are forced to live elsewhere temporarily.
The specific coverage limits and terms of additional living expense insurance may vary depending on the insurance policy and provider. However, it is generally understood that the coverage will reimburse the policyholder for the necessary and reasonable expenses incurred due to their displacement.
It is important for policyholders to review their insurance policy thoroughly to understand the details of their coverage and any specific exclusions or limitations that may exist. By having additional living expense insurance in place, homeowners can have peace of mind knowing that they will have financial support in the event of a disaster that renders their home uninhabitable.
