Additional Living Expense Insurance

AAA

DEFINITION of 'Additional Living Expense Insurance'

Coverage under a homeowner's, condominium owner's or renter's insurance policy that covers the additional costs of living that are incurred by the policy holder should the policy holder be temporarily displaced from their place of residence. Such coverage is usually at about 10% to 20% of the insurance that covers the dwelling.

INVESTOPEDIA EXPLAINS 'Additional Living Expense Insurance'

Additional living expense insurance can cover things like the increase in a monthly food bill due to having to eat-out at restaurants or even the loss of income that might be incurred if the insured person were renting out part of their space to a tenant. Essentially the insurance is intended to cover the insured person for the extra expenses he or she may incur due to being temporarily displaced from their home, such as in the case of a fire or flood.

RELATED TERMS
  1. Umbrella Insurance Policy

    Extra liability insurance coverage that goes beyond the limits ...
  2. Insurance Score

    A rating computed and used by insurance companies that represents ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Liability Insurance

    Any type of insurance policy that protects an individual or business ...
  5. Hazard Insurance

    Insurance that protects a property owner against damage caused ...
  6. Equivalent Flat Rate

    The rate at which a flat rate insurance guarantee scheme and ...
RELATED FAQS
  1. How are contingent beneficiaries informed of a payout?

    One of the greatest tools in estate planning is beneficiary designation. Listing primary and contingent beneficiaries is ... Read Full Answer >>
  2. What financial ratios are most useful for an investor to evaluate the liquidity of ...

    An insurance company, like any other nonfinancial company, needs access to liquidity in case it needs to fulfill its debt ... Read Full Answer >>
  3. What are the most popular mutual funds that invest primarily in the insurance sector?

    Under the purview of the financial services industry, the insurance sector is an attractive investment option for mutual ... Read Full Answer >>
  4. What economic indicators are important to monitor when investing in the insurance ...

    Inflation and interest rates are the best economic indicators to monitor when investing in the insurance sector. Unlike with ... Read Full Answer >>
  5. Why do some companies in the insurance sector engage in reinsurance?

    Some companies in the insurance sector engage in reinsurance because they want to reduce risk. Reinsurance is basically insurance ... Read Full Answer >>
  6. Why is the insurance sector considered a low-risk investment?

    Historically, the insurance sector has enjoyed modest returns and perceived safety. It's been a favorite for investors who ... Read Full Answer >>
Related Articles
  1. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  2. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  3. Credit & Loans

    Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  4. Insurance

    Understanding Cash Surrender Value

    The amount of money an insurance company pays the owner of an insurance policy if the policy is voluntarily surrendered prior to the event that is insured
  5. Professionals

    An Advisor's Guide to Prof. Liability Insurance

    A guide to what financial advisors need to know about professional liability insurance.
  6. Insurance

    India's Two-Child Policy

    As of 2014, 11 Indian states have passed laws to restrict Indian citizens from having no more than two children.
  7. Economics

    What Does Asymmetric Information Mean?

    Asymmetric information describes a situation where one party in a transaction knows more than the other.
  8. Fundamental Analysis

    How to Calculate a Combined Ratio

    Combined ratio is a formula used in the insurance industry to measure the performance of an insurance company.
  9. Insurance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  10. Economics

    How Big Data Has Changed Insurance

    No longer confined to technology, big data has become integral to providing solutions to the insurance industry's long standing challenges.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center