Additional Living Expenses

Wildfire Evacuations: Insurance coverage may help pay for temporary housing and other expenses

As wildfire season intensifies across the Pacific Northwest, many homeowners and renters may be forced to evacuate their homes with little notice. While it's natural to focus first on protecting your family and belongings, it's also important to understand a type of insurance coverage that can help ease the financial burden of displacement: Additional Living Expense (ALE) coverage.

ALE coverage, included in many homeowners, renters, and condominium insurance policies, may help pay for the extra costs people incur when they cannot live in their home because of a covered loss, such as wildfire damage. And, importantly, ALE coverage may include financial assistance for families evacuated from their homes during a wildfire emergency – even if their insured residence avoids damage from the fire.

"Many people don't realize their insurance policy may help cover some of the unexpected costs that come with being displaced from their home," said Kenton Brine, NW Insurance Council president. "Understanding your coverage before you need it can help reduce stress during an already difficult situation."

ALE coverage is designed to pay the difference between a household's normal living expenses and the increased costs associated with temporary relocation. Depending on the policy, coverage may help pay for:

• Hotel or temporary rental housing costs
• Increased food expenses when cooking at home is not possible
• Laundry expenses
• Pet boarding costs
• Additional transportation expenses
• Storage fees for personal belongings

Policy limits and coverage details vary, so it’s important to review your policies and contact your insurance company or agent with questions about their specific coverage.

If evacuated, it’s also important to do the following:

• Contact your insurance company as soon as possible if you are displaced.
• Keep all receipts related to temporary living expenses.
• Ask your insurer what expenses may be eligible for reimbursement.
• Maintain records of communication with your insurance company.

In some cases, ALE coverage may apply when a civil authority, such as a state or local fire or law enforcement agency, prohibits access to a neighborhood due to wildfire - even if the insured residence itself is not damaged. Coverage – both the amount and time limits available – varies by policy, so it is important to confirm your policy coverages with your insurer or insurance agent.

Renters should be aware that renter's insurance policies also often include Additional Living Expense coverage. While a landlord's insurance policy covers the building itself, it generally does not cover a tenant's personal belongings or temporary housing costs.

"Whether you're a homeowner or renter, it's important to understand what your policy covers before disaster strikes," said Brine. "A quick review today can help prevent confusion and financial hardship later."

For more information about insurance and disaster preparedness, visit NW Insurance Council’s website at www.nwinsurance.org