Ordinance or law coverage is a crucial provision designed to pick-up costs associated with upgrading a home to meet current building codes, after it’s been damaged or destroyed by a covered loss. In this article, we will explore the importance of ordinance or law coverage and its significance in protecting individuals.
Understanding Ordinance or Law Coverage
Ordinance or law coverage, also known as building ordinance coverage, pays for the costs associated with upgrades your home needs to have done, to meet building codes that didn’t exist at the time the house was originally built.
Building codes and ordinances evolve overtime. When building a house, you must meet building safety standards and pass an inspection certifying the house is safe to live in. Homes built years ago met the building ordinances of their day, and homes built today must meet today’s guidelines. This provision addresses the costs associated with including the new “ordinance” upgrades into your new/rebuilt home.
It applies to situations where repairs, alterations, or rebuilding become necessary due to changes in local laws, ordinances, or regulations.
Coverage Components
Ordinance or law coverage generally encompasses three key components:
• Demolition Coverage: This component provides financial protection for the cost of demolishing a damaged structure when required by law or ordinance.
• Increased Cost of Construction: This coverage addresses the additional expenses that may arise when repairing or rebuilding a structure to comply with current building codes or regulations. It helps cover the cost difference between the original materials and methods used versus the
updated requirements.
• Loss of Value: In some cases, local ordinances may require a structure to be demolished if damage exceeds a certain percentage of the building. Loss of value coverage provides compensation for the diminished value of a property that results from partial demolition or the inability to rebuild.
Importance of Ordinance or Law Coverage
Ordinance or law coverage is essential for individuals as it protects against unexpected expenses that may arise during property repairs or reconstruction after a claim. Without this coverage, individuals could face significant financial burdens if they are required to meet updated building codes or demolish and rebuild their structures entirely.
Because building codes and regulations are subject to change over time, older structures may not meet current standards. There are many beautiful homes throughout Arizona, Phoenix, Tempe, Scottsdale, Gilbert and Chandler, that if damaged would need to be updated to meet current building codes that didn’t exist at the time the homes were first built. Without this coverage, if such a structure suffered damage, the owners could be responsible for bringing their home up to code and paying for it out of their own pocket.
Conclusion
Ordinance or law coverage provides individuals with valuable protection against the financial implications of complying with building codes and regulations. By including this coverage in your homeowner’s insurance policy, you can safeguard yourself from unexpected expenses and know your property is adequately protected.
Feel free to call us here at Imes Insurance Associates, if you have any concerns about your coverage or want to review your policy for any reason.
