Coverage D (Loss of Use / ALE) — what to expect after a total loss
By Severance Calculator Editorial · Updated
What Coverage D covers
Coverage D — Loss of Use, also called Additional Living Expense (ALE) — pays the difference between your normal living costs and what you must pay during reconstruction (temporary rent, hotel, meals out, pet boarding). Industry default = 20% of Coverage A on HO-3; 30% on HO-5.
Duration and statutory floors
Most policies cap at 12-24 months. Colorado SB22-206 (post-Marshall-Fire) requires at least 24 months in declared-disaster total losses. After major California fires, regulators have ordered carriers to extend ALE further.
When reconstruction outlasts the limit
You bear the gap personally. In disaster-prone regions, reconstruction can run 24-36+ months due to contractor backlog. Either increase Coverage D by endorsement, or budget for the gap.
Coverage D and your mortgage
No. Coverage D pays the ADDITIONAL living expenses above normal. Mortgage continues. Some homeowners qualify for mortgage forbearance after a declared disaster.
To anchor a 20% or 30% Coverage D target, run the rebuild-cost calculator for a Coverage A range and review methodology for the data behind it.
Related coverage explainers
Glossary: Coverage D.
FAQ — Coverage D
- What is Coverage D on a homeowners policy?
- Coverage D — Loss of Use, also called Additional Living Expense (ALE) — pays the difference between your normal living costs and what you must pay during reconstruction (temporary rent, hotel, meals out, pet boarding). Industry default = 20% of Coverage A on HO-3; 30% on HO-5.
- How long does Coverage D last?
- Most policies cap at 12-24 months. Colorado SB22-206 (post-Marshall-Fire) requires at least 24 months in declared-disaster total losses. After major California fires, regulators have ordered carriers to extend ALE further.
- What happens if reconstruction takes longer than my Coverage D limit?
- You bear the gap personally. In disaster-prone regions, reconstruction can run 24-36+ months due to contractor backlog. Either increase Coverage D by endorsement, or budget for the gap.
- Does Coverage D pay for my mortgage?
- No. Coverage D pays the ADDITIONAL living expenses above normal. Mortgage continues. Some homeowners qualify for mortgage forbearance after a declared disaster.