Additional Living Expenses

Most people understand that insurance policies are drafted by insurance companies. There is little to no negotiation of terms between a potential policyholder and the insurance company, so if language is ambiguous it is construed against the drafter—the insurance company. Below you will find details about a recent case out of the Western District of Missouri written by an esteemed panel of Judges. It is also a good refresher from elementary school –when a teacher asks you to define a word, you should not then use that word in the definition. American Family forgot this and it is an expensive lesson to learn.

Continue Reading Replacement Cost With Like Kind and Quality and ALE During Construction Awarded: Ambiguous Policy Language is Construed Against the Insurance Company

As we near the end of this Additional Living Expenses (ALE) blog series, we can reflect back at past case law and point out there are not only negative exceptions that impact an insured. Sometimes exceptions reflect positively that aid the insured on recovery where ALE is owed to the insured due to an uninhabitable residence after a loss.

Continue Reading The Road to ALE, From Loss to Being Incurred, Part 7 — The Exceptions that Support Recovery”

Over the past few weeks I’ve blogged on Additional Living Expenses (ALE) and how case law has influenced the recovery of ALE in many states. There are exceptions to every rule, and over the next few weeks I will continue the ALE blog series and discuss the times where case law has indicated that ALE is not recoverable. Some of these cases are exceptions, but when adjusting a case, knowing where the exceptions are can be the difference between coverage for an insured or leaving the insured with out-of-pocket expenses.

Continue Reading The Road to ALE, from loss to being incurred, Part 6: ALE – The Limitations on Recovery

In this series of ALE blogs, I’ve come to realize that the incurring of Additional Living Expenses (ALE) is probably the most disputed part of ALE and the definitive factor of whether ALE is paid by the insurance company. It’s probably the most controversial part, as the whole concept of ALE “incurred” is based upon the definition and interpretation of “incurred” and this interpretation differs by state. Overall, there is little case law on ALE as compared to other areas of property insurance law. Generally, most states interpret “incurred” to be some sort of liability to pay, such as entering into a lease above and beyond normal rent or mortgage may trigger the payment of ALE. Remember, we must still look at the whole picture of when an ALE payment may be due from the insurance company. Before ALE payments are triggered, there must be:

  1. a covered loss;
  2. uninhabitable home; and
  3. incurred ALE expense.

Continue Reading The Road to ALE, from Loss to Being Incurred, Part 4 – ALE: the Definition of Incurred

In Part 2 of this series I talked about what constitutes "Uninhabitable conditions" that trigger the possibility of ALE payments to the insured. This week, before we hit the ever controversial prong of ALE "incurred expense," I wanted to revisit a sub-issue of ALE that insurers are a stickler on: "normal living conditions."

Continue Reading The Road to ALE, from Loss to Being Incurred, Part 3 – “ALE pays for Normal Living Conditions”

During the 15 to 30 seconds that my home rolled and shook on Sunday from the 3.5 earthquake centered in Baldwin Hills, California, I was prompted to think about the habitability or rather “uninhabitable conditions” I may encounter if the shaking got any worse or continued. Earthquakes are rather commonplace in California and thankfully this earthquake, which was centered within 10 miles of my home, ceased and I was able to continue on without damage or loss.

Continue Reading The Road to ALE, from Loss to Being Incurred, Part 2 – “Uninhabitable Conditions”

On Thursday, March 26, 2015, The First Party Claim’s Conference West was held in Marina del Rey, California. At the conference, I was delighted to speak and present two topics for CE credits. My presentations were titled, “Additional Living Expenses – Getting ALE Covered – Does It Really Need To Be Incurred?” and “Documenting a File, Tips for Communicating with the Insurance Company.” Since the conference, I’ve heard from many conference attendees who requested copies of my presentation and were interested in learning more on the topics.

Continue Reading The Road to ALE, from Loss to Being Incurred, Part 1

One of the most valuable portions of a residential insurance policy is often overlooked when an insured purchases the policy. I am talking about the additional living expenses (ALE) portion of the policy that provides an insured with the monies above and beyond what they normally spend for everyday living if a loss occurs that puts the insured out of their home because their home is deemed unlivable. The ALE portion of the policy is often construed as one of the most imprecise portions of the policy because there are no general guidelines for the insured as to how much money they will be allotted in the event of a loss, and what exactly is covered under ALE.

Continue Reading Additional Living Expenses — What Can You Ask of the Insurance Company After a Loss?

Ordinance or law (“L&O”) coverage is “[c]overage for loss caused by enforcement of ordinances or laws regulating construction and repair of damaged buildings.”1 Additional living expense (“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.”2

Continue Reading When Is A Policyholder Eligible To Receive L&O And ALE Benefits?

In my post last week, Navigating Payment Due to Policyholders for Additional Living Expenses, I discussed how difficult it can be for policyholders to receive funds from their insurance carriers for the costs associated with securing a temporary residence or other extra living expenses resulting from a covered loss. Public adjusters are often tasked with assisting on claims where the insureds have been displaced from their homes and seek payment for additional expenses on their behalf. After posting Navigating Payment, the response from public adjusters and other readers has prompted a continued discussion on this crucial area of coverage.

Continue Reading Navigating Payment Due to Policyholders for Additional Living Expenses – Part II