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On an ISO DP-3 form, what does Coverage E — Additional Living Expense (ALE) reimburse, and at what default limit?
Increased living expenses of the named insured who occupied part of the dwelling when a covered loss makes it uninhabitable, up to 20% of Coverage A
BThe landlord's lost rental income from tenants while the rented portion of the dwelling is uninhabitable after a covered loss, up to 10% of the Coverage A dwelling limit
CLiability defense costs and supplementary payments arising from a covered occurrence, up to 20% of the Coverage A limit
DReplacement of the named insured's personal property destroyed in a covered loss, up to 50% of the Coverage A limit
Why this is the answer
Coverage E — Additional Living Expense reimburses the necessary increase in living expenses the named insured incurs to maintain a normal standard of living when a covered loss makes the dwelling — or the portion the named insured occupies — uninhabitable. On the DP-3, Other Coverages lets the insured use up to 20% of the Coverage A limit, as additional insurance, for fair rental value and additional living expense combined. This coverage applies when the named insured actually lives in part of the dwelling (e.g., owner-occupied duplex where one unit is rented) (ISO DP 00 03 Section I Coverage E).
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