Dwelling Policy (DP)Question 318 of 531
A family normally spends $2,400 a month on housing and food. Living elsewhere after a covered fire, they spend $3,900 a month. Additional living expense pays them:
a.$6,300 a month
b.$2,400 a month
c.$3,900 a month
d.$1,500 a month
Explanation
Additional living expense pays the increase in living costs rather than the whole bill, so $3,900 less the $2,400 the family would have spent anyway leaves $1,500 a month. Paying the full $3,900 would leave them better off than before the fire, which indemnity does not allow. The coverage runs for the shortest time needed to repair or to settle elsewhere.
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