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What are these coverages for?

These are coverages payout due to the enforcement of ordinances or laws regulating construction and repair of damaged buildings. 

Ordinance and law coverages are typically referred to as Coverage A, B, & C.  Each one applies to differently to a given claim scenario.   



Coverage A ‐ Let’s say you own a building and you have a fire, but only half of the building gets destroyed.  The Building Department or the Fire Marshall may say you need to demolish the undamaged part.  Without Ordinance and Law, your insurance might not pay for the part of the building that wasn’t damaged in the original fire.  That’s where Coverage A would step in to pay for the undamaged portion of the building. 

Coverage B ‐ Let’s use the claim scenario from above.  You need to demolish an undamaged portion of the building.  There are costs associated with that demolition.  Coverage B would pay for that. 

Coverage C – Again with the same claim scenario as above.  Let’s assume your building was old and built in the 1950s.  Your insurance is designed to replace with “Like Kind and Quality”.  There are additional costs that come with rebuilding an old building.  Building codes have changed a lot over the years. All of those upgrades in building codes typically increase the cost of construction.  Coverage C will pay those additional amounts.  The upgrades can be pretty obvious and not too much more expensive like your wiring or plumbing for example.  Others that can be substantially more price could be handicap access because of the Americans with Disabilities Act or The Green Roof initiative in Denver, CO, which is requiring gardens be installed on roofs of certain sized buildings. 

It's always a good idea to read your policies during renewal time.  The cheapest option isn’t always the best option after you’ve had a claim. The wrong policy could end up costing you six figures when you ’re trying to rebuild your structure.

If you need to have an expert look over your policies and see how you can improve, reach out to an expert by filling out the short form below. 

Posted 10:55 PM

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