Last year, a massive house explosion in a Mississauga neighbourhood forced the evacuation of several homes in the surrounding area. As of now, some of those displaced people have still not moved back into their homes, which can cause quite an amount of stress and anxiety on the part of the insured.
This requires you as the insurance policyholder to examine your Additional Living Expenses (ALE) coverage under your homeowners insurance policy very carefully. ALE coverage reimburses the insured for the cost of maintaining a comparable standard of living following a covered loss that exceeds the insured’s normal expenses prior to the loss.
Additional Living Expenses coverage can be triggered by the following situations:
Prohibited access for mass evacuation by order from a civil authority
This is when either the police or the fire department orders people in a neighbourhood to evacuate their homes due to some surrounding emergency, or when a state of emergency is declared by a governing body for example: The Insurance Bureau of Canada.
Prohibited access as a direct result of damage to neighbouring premises
This aptly describes the situation with the Mississauga house explosion. The IBC also sets this coverage to a maximum of 14 days. However, policyholders should check their policy limits.
Damage to your home by an insured peril
This condition is contingent upon the standard reasons why you as the policyholder would have to leave your home, such as fire, water damage, etc. This coverage typically lasts for the reasonable time required to repair or rebuild your home.
Recommendation not to return home for health or medical reasons
In one case, the Alberta Medical Officer of Health recommended, for medical or health reasons, that some people not return home immediately after the mass evacuation order was lifted. This is not typically covered under ALE; however, policyholders should contact their insurer to discuss their situation.
But you’re probably wondering what exactly ALE covers:
ALE covers anything over and above your normal expenses, such as:
- If you were unable to cook meals where you’re temporarily staying, and had to eat at a restaurant, the increase/difference in expense would be covered.
- Similarly, if your temporary accommodations didn’t have laundry facilities and you had to use a laundromat, those expenses should also qualify.
But you should note, ALE does not cover all of your living expenses while you are displaced; it covers your increased cost of living as a result of being displaced.
If you have any questions regarding your policy’s ALE coverage or any other questions pertaining to your insurance policy, please feel free to call a Pacific Insurance Broker Representative at (416) 494-1268.
