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What limitation does Coverage E - Additional Living Expense impose?

  1. Only covers expenses for lodging

  2. Covers only minimum living expenses

  3. Only covers expenses during active repairs

  4. Only applicable in the event of theft

The correct answer is: Only covers expenses during active repairs

Coverage E - Additional Living Expense is designed to provide financial assistance when a dwelling becomes unusable due to a covered loss. This coverage helps policyholders pay for increased living expenses they incur while their home is being repaired. The correct choice emphasizes that this coverage is specifically applicable during the period of active repairs to the dwelling. It ensures that individuals can maintain a standard of living comparable to what they had before the loss. The other options present limitations that do not accurately reflect the intent of Coverage E. For instance, stating that it only covers lodging overlooks that it includes various necessary expenses such as food and transportation, which may exceed standard living costs during the repair period. While some might consider "minimum living expenses," this description fails to capture the broader range of additional costs that the coverage provides for. Moreover, the mention of only applying during theft incidents mischaracterizes the scope of this coverage, which applies to any covered peril that makes the dwelling uninhabitable, not just theft.