What are Additional Living Expenses in insurance terms?

Additional Living Expenses (ALE) in insurance terms refer specifically to the compensation provided to the insured to help maintain their standard living conditions when they are unable to reside in their home due to a covered loss. This typically includes costs related to temporary housing, meals, and other essential expenses that allow the policyholder to continue their daily life while repairs are being made or until a permanent solution is found.

The focus is on ensuring that the insured is not financially burdened by the necessity to secure alternative living arrangements and can live as normally as possible despite the circumstances. This allowance is crucial, as it serves to bridge the gap between the insured's previous living situation and their current one, enabling them to cover daily expenses that would otherwise be part of their regular budget if they were home.