One of the most needed types of insurance coverage is also one of the most commonly overlooked, or even known about. It’s called Ordinance or Law Coverage. ?As your property becomes older certain changes in your county’s building codes and ordinances change to reflect new standards for construction. If your older property suffers a substantial loss, fixing it may require a higher construction standard to reflect new laws, therefore simply replacing your home as it was just isn’t good enough to meet these new laws and codes.
Let’s say, for example, your home was built in 1972, and in 1993 the building ordinance was upgraded to call for portions of the same building to be built in a different way. Complying with this code could require changes in design and building materials, and could entail substantial additional costs for labor and materials.
As this occurs the cost of replacing your building could be greatly increased. If these new laws are not met during re-construction the codes inspector must stop construction until such time as these building standards are properly met. If your insurance doesn’t cover this increase in government standards then you risk being in a “catch 22” situation where you will have to pay for these upgrades before completing the repairs and possibly resuming occupancy.
Please review your policy to find out exactly what it offers for ordinance or law coverage.