What constitutes additional living expenses when an insured is displaced?

Additional living expenses (ALE) refer to the extra costs incurred by an insured when they are forced to live away from their primary residence due to a covered loss, such as fire or severe storm damage. The purpose of ALE coverage is to help the insured maintain a standard of living comparable to what they had before the displacement.

The option regarding the cost of maintaining living arrangements similar to the insured's previous home is correct because it includes expenses related to temporary housing, utilities, and other associated costs that arise from being unable to reside in the home. This ensures that the insured does not suffer financially from being displaced and can continue to live in a manner somewhat similar to what they were accustomed to before the incident.

The other options do not meet the criteria for additional living expenses. Payments for beauty salon services do not relate to the necessary expenses incurred due to being displaced. Reimbursement for travel expenses related to claims typically does not fall under ALE, as it concerns travel rather than living arrangements. Fees for hiring a public adjuster are related to the claims process and do not directly address additional living costs incurred by a setback like displacement from a home.