What does "additional living expenses" coverage typically include in a homeowners policy?

"Additional living expenses" coverage in a homeowners policy is designed to help the insured manage the costs incurred when their home becomes uninhabitable due to a covered loss, such as fire, storm damage, or other incidents agreed upon in the policy. This coverage typically includes costs associated with living elsewhere, such as hotel stays, dining expenses, and other necessary expenses that the policyholder would not have incurred if they were still living in their original residence.

The purpose of this coverage is to mitigate the financial impact of being displaced from one's home and to ensure that the insured can maintain a standard of living similar to what they enjoyed before the loss occurred. It does not cover everyday expenses or improvements to the home itself, making it clear that its primary function is to support living arrangements while repairs are being conducted or while waiting for a new living situation to be established.