What Is Ordinance & Law Coverage

Why You Need Ordinance & Law Coverage

A standard Insurance policy will pay to replace any damage with like kind and quality of what you had previously thus bringing you back to pre-loss condition, but only if the building codes (ordinances & laws) do not require a better/upgrade of what you had before. 

Here are a few examples of how you can be majorly out of pocket for repairs if you do not carry Ordinance & Law insurance coverage.

Example 1
If your building does not have hurricane shutters or hurricane windows and the code in your area requires them, the ordinance & law portion of your policy will cover the additional cost required to install them as your insurance policy will only pay to replace your original windows(which are not up to code anymore) but will not pay the increased cost for new hurricane windows or hurricane shutters.

Another example could be if the house was built in the 70’s meaning the electrical wiring is outdated and evidently not up to code. If you then have a roof leak that stains or damages your ceiling leading you to open the ceiling to do repairs. If while doing the repairs the faulty wiring was discovered code will force you to rewire the entire house making what seemed like a simple repair now a big electrical overhaul.

Example 2
A building or home is partially destroyed in a fire, and the local code requires that the undamaged remainder of the building be demolished. 

The standard insurance policy will not pay for the undamaged portion of the building which must be destroyed. In order to be insured for that, the building owner needs to have purchased Ordinance or Law Coverage.

Example 2
A building or home is partially destroyed in a fire, and the local code requires that the undamaged remainder of the building be demolished. The standard insurance policy will 
not pay for the undamaged portion of the building which must be destroyed. In order to be insured for that, the building owner needs to have purchased Ordinance or Law Coverage.

In the above example the cost to demolish the undamaged portion of the covered building and to clear the site of debris wont be covered under the standard policy.  However if you had Ordinance & Law coverage it would be covered through that.

 

If a building is destroyed, the local code will often prohibit the reuse of the building foundations, etc. This would mean that the cost of pouring a new foundation as per the code will have to be paid out of pocket unless there is adequate Ordinance & Law coverage.

In order to have coverage for the above items, the building owner needs to have purchased Ordinance or Law Coverage for an amount sufficient to pay for the increased cost to bring the damaged (and any undamaged) portion of the building up to code, including the foundations, etc.

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