Loss of Use, Additional Living Expenses, ALE or coverage D; they all mean the same thing, but what is it? If a loss makes your residence uninhabitable, then there may be additional money you will collect from your insurance claim. The increased payout will be for your additional living expenses during the time required to repair or replace the damage to your dwelling. If you permanently relocate after a loss, it might also pay for your increased expenses during the time require to move your household to the new location.
Imagine your house burns down, you will undoubtedly need someplace to live. Many people don’t realize it, but just because your house burns down, doesn’t mean you don’t have to pay your mortgage. Your mortgage payment will still be due, month after month! Insurance can help you to find a comparable house to live in while your house is rebuilt.
Loss of use is a coverage that can rack up expenses quickly to an insurance carrier. Because of this, insurance companies have put in place tighter limits and time restrictions. Especially for homeowners in Colorado, I recommend carrying at least 24 months of Additional Living Expenses coverage. I’m seeing many insurance companies limit loss of use to 12 months. Talk to any contractor (or homeowner who has experienced a house fire), and they will tell you there is almost no way you will be back in your house within 12 months after a fire. Between the debris removal, the permitting, the inspections and weather, it’s next to impossible. The other thing to look at is your monetary limits on loss of use. You probably want to be in the same neighborhood while your house is being rebuilt. What does a similar house in your neighborhood (furnished) rent for on a month to month basis? Make sure at a minimum you multiply that number by 24.
On most home policies, loss of use will also apply if a civil authority prohibits you from the use of your residence as a result of direct damage to neighboring premises by a cause of loss covered. I’ve seen loss of use paid out when evacuation notices are in place for neighborhoods due to a wildfire.
Mike Schmisek
303-922-1002
Mike Schmisek is the founder, President and principal agent of Premier Mountain Insurance, an independent insurance agency serving Jefferson County and the Denver metro area from its office at 7991 Shaffer Pkwy in Littleton, Colorado.
Mike started Premier Mountain Insurance in October 2019, after eleven years running one of the most successful Farmers Insurance agencies in Colorado. Before insurance, he built a career in business management and leadership. He was drawn to the industry for the same reason he has stayed in it: the depth of the relationships built with long-term clients, and the chance to make a real difference for a policyholder at the moment it matters most.
His first agency, the Mike Schmisek Insurance Agency, opened in 2008 on a straightforward idea — build an agency around the client, not the sale. It worked. The agency earned repeated awards and distinctions for both the quality of its book and the speed of its growth. But a captive agent can only offer what one company sells, and Colorado's market changed faster than any single carrier could answer. Going independent let Mike do what he had wanted to do all along: represent the client instead of the carrier.
Many years later, Premier Mountain Insurance places personal and commercial coverage through more than two dozen carriers, with a licensed team handling everything from a first home purchase to contractors' liability and workers' compensation. Mike still writes business himself, and still believes the job is the same one it was in 2008 — find people the right coverage at a fair price, then be there when they need it.
Mike was born and raised in Fargo, North Dakota. After a brief stint in Woodbury, Minnesota, he moved to Highlands Ranch, Colorado with his parents in 1994 as a high school student, back when Highlands Ranch Parkway had just been paved and the town had two restaurants. He graduated with honors from Highlands Ranch High School in 1997 and went on to Colorado State University in Fort Collins, earning a degree in Political Science with a minor in History in 2001. Mike lives in the foothills of south Jefferson County with his wife, three daughters, and dog. Outside the office he can be found camping, hiking, fly fishing, mountain biking, or in the CrossFit gym.
