What is Ordinance or Law Coverage?



Ordinance or Law

What is it?

Most Counties and Cities have building ordinances and laws pertaining to new construction and repair of damaged structures.

What does that mean for me?

In the event of a loss to your home, local ordinances and laws cause some of the following issues ;

  1. Required tear down of the remaining structure
  2. Upgrades to undamaged portion of the structure, such as new electrical or plumbing.
  3. Upgrades at reconstruction.
  4. Inability to reconstruct if the property has been zoned for commercial or agricultural use.

What about my homeowners insurance?

Your standard home policy provides coverage to the portion of your home that was damaged.  The contract requires the insurance company to “indemnify” you, or make you whole.  Essentially they are required to give you back what you had.

If local construction ordinances require upgrades during a rebuild, the additional costs for these upgrades are not included in your limit of coverage.

In the same instance, coverage is provided for the damaged portion, and the cost of tear down and removal of the undamaged portion of your home can be costly.  These expenses are covered on a standard home insurance policy.

What can I do?

Ordinance or Law Coverage can help fill in these gaps.  It provides coverage for the undamaged portion of the building, cost to remove debris and increased costs of construction due to ordinance compliance.

Limited Ordinance or Law Coverage is often added to homeowners policies by the carriers.  Standard limits of coverage range from $5,000 to $20,000 with additional limits available.

Talk to your agent about your situation and how ordinance or law coverage may be a valuable part of your insurance protection plan.


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