Additional living expense provides coverage once the property has been damaged to the point that the insured cannot live it in. Additional costs that the insured incurs to reside elsewhere until the property is repaired are covered. These costs include rent, meals, laundry, pet boarding, and anything else required to maintain the insured's normal standard of living. For example, the insured's mortgage is $1,000 a month and that expense remains while the house is being repaired. The insured is spending $200 per night for a hotel, plus meals. That $200 a night and meals will be covered as additional living expenses. If for some reason the mortgage did not continue while the property was being repaired, then the cost of the hotel would not be covered since it is not an extra expense, it is replacing the $1,000 mortgage.

 Many questions arise around additional living expenses. The intent is to keep the insured at his usual standard of living, not more, not less. If the insured eats hamburgers for dinner, then steak dinners at a fancy restaurant are above his normal standard of living. However if the insured makes gourmet meals at home, then dinners at fancy restaurants are in line. Likewise, an insured with a pool or workout equipment he uses daily needs access to a pool or workout equipment when he is displaced. If the family dog sleeps in bed with the insured every night then accommodations that allow pets is necessary, or the dog needs to be boarded in a suitable doggie hotel.

 Payment is for the shortest time required to repair or replace the damage. However, if the insured permanently relocates, then payment is for the shortest time required for the insured to settle the household somewhere else. If a large number of properties have been effected by the same situation, such as the wildfires, it may take longer than normal for properties to be repaired due to increased demand on repairmen.

 Fair rental value is a different kind of loss of use coverage. It applies when the property is rented to others by the insured, or is held for rental to others. If a loss makes a section of the rented property not fit to live in, then the fair rental value of the premises less any expenses that do not continue while it is not fit to live in are paid. For example, and insured rents the basement of his dwelling; it has a separate entrance and a kitchenette. A fire damages the premises, and the tenant can no longer stay in the basement. The tenant is displaced and is no longer paying rent to the insured. The value of that rent payment that is now lost is paid to the insured as fair rental value. If the insured did not have a tenant at the time of loss but was looking for a tenant by putting ads online or in the paper, then the loss of potential rental value is covered.

 Local civil authorities may prohibit an insured from use of the premises if direct damage has occurred to neighboring premises by a covered peril. The evacuation of neighborhoods due to damage to nearby areas is a perfect example of how this works. One thing to keep in mind is that neighboring is not defined, leading to possible confusion. The dictionary provides little help. Merriam Webster online defines neighbor as “one living or located near another”. Therefore, the insured gets the benefit of the doubt within reason. A few houses down from the insured premises are neighboring; houses two miles away are not. When civil authority prohibits use of the property, the loss is covered as provided under additional living expenses or fair rental value, but for no more than two weeks.

 There is an exclusion for loss or expense due to cancellation of a lease or agreement. Coverage applies only if leases or agreements stay in place. The expiration of the policy does not affect any of the time periods for applicable losses under these coverages.