When an insured incurs additional living expenses due to home damage, what will the homeowners policy cover?

The homeowners policy offers coverage for additional living expenses when the insured’s home becomes uninhabitable due to a covered loss. This is referred to as Coverage D, which is specifically designed to assist policyholders in maintaining their standard of living while their home is being repaired or rebuilt.

Under this coverage, all reasonable additional living expenses incurred, such as the costs associated with temporary housing—whether it's an apartment rental, hotel stay, or even meal expenses—are covered up to the policy limit. This comprehensive protection is essential because it aims to ensure that the insured can continue to live comfortably and have their needs met despite the disruption caused by the damage to their home. Therefore, the correct answer accurately reflects this principle by indicating that all expenses incurred for additional living arrangements are covered, provided they stay within the limits outlined in the policy.