What does the term “additional living expenses” refer to?

The term “additional living expenses” refers specifically to the extra costs that a policyholder incurs when their primary residence becomes uninhabitable due to a covered loss. This situation typically arises following events like a fire, storm, or other disasters that require the homeowner to temporarily relocate.

In such instances, the homeowner may need to pay for accommodations such as hotel stays or rent for a temporary living space, as well as increased food costs, since they are no longer able to prepare meals in their own kitchen. The purpose of this coverage is to help mitigate the financial burden during the time that the dwelling is being repaired or rebuilt.

This unique aspect of insurance covers expenses that go beyond what the homeowner would usually have to spend, thus classifying them as "additional" living expenses. Choices related to routine maintenance, utility expenses, and extra insurance premiums do not fit this definition as they do not reflect unforeseen circumstances or additional costs arising from a loss of use of the dwelling.