Loss of Use / Additional Living Expenses Calculator
Estimates the reimbursable Additional Living Expenses (ALE) you may claim when a covered loss forces you out of your home. ALE covers only the increase in your normal living costs during the displacement period.
Formula
Step 1 – Daily Normal Expenses:
Normal Daily = (Normal Housing + Normal Food + Normal Transport + Normal Other) ÷ 30.4375
Step 2 – Daily Actual Expenses:
Actual Daily = (Actual Housing + Actual Food + Actual Transport + Actual Other) ÷ 30.4375
Step 3 – Daily Savings Credit:
Savings Daily = Mortgage/Rent Savings ÷ 30.4375
Step 4 – Net Daily ALE Increase:
ALE Daily = max(0, Actual Daily − Normal Daily + Savings Daily)
Step 5 – Total ALE for Displacement Period:
Total ALE = ALE Daily × Displacement Days
Step 6 – Reimbursable ALE (capped by policy):
Reimbursable ALE = min(Total ALE, Policy ALE Limit)
Assumptions & References
- ALE (also called "Loss of Use") covers only the increase in living costs above your normal pre-loss expenses — not the full cost of temporary housing.
- Standard homeowners policies (ISO HO-3) provide ALE coverage under Coverage D, typically 20–30% of the dwelling (Coverage A) limit.
- Renters policies (ISO HO-4) typically provide ALE at 30% of personal property coverage.
- If you receive any financial benefit from not occupying your home (e.g., suspended mortgage payments, subletting income), that amount is deducted as a "savings credit."
- Daily rates are derived by dividing monthly figures by 30.4375 (= 365 ÷ 12), the average number of days per month.
- Eligible ALE expenses commonly include: temporary rent/hotel, restaurant meals (above normal food costs), laundry, storage, pet boarding, and increased commuting costs.
- Non-reimbursable items typically include: mortgage principal/interest (if home is uninhabitable but mortgage continues), personal property replacement, and luxury upgrades.
- ALE payments are generally not taxable income under IRS Publication 525 when they compensate for actual increased living costs.
- References: ISO Homeowners Policy Form HO-3 (2000 ed.), Section I – Coverage D; NAIC Homeowners Insurance Guide; IRC § 123 (exclusion for insurance proceeds for living expenses); IRMI Loss of Use definition.
- This calculator provides estimates only. Final ALE amounts are determined by your insurer and adjuster based on documented receipts and your specific policy language.