Personal Insurance Blog

If there’s a fire in your home and only one room is damaged, insurance should pay for its repair or replacement.  What happens when the local electrical inspector comes in after the fire, and requires full replacement of an old and obsolete electrical system – none of which was actually damaged by the fire?   The owner has no choice: fix it to get back in the house.  While fixing undamaged (but outdated) parts of the house aren’t insured under a standard property policy, there is a solution.

The Ordinance or Law endorsement provides additional funds, commonly up to 10% of your dwelling limit, for costs you incur due to the enforcement of any ordinance or law which requires or regulates:

1)       The construction, demolition, remodeling, renovation or repair of that part of a covered building or other structure otherwise damaged and insured;

2)      The demolition and reconstruction of the undamaged part of a covered building or other structure, when that building or other structure must be demolished because of insured  damage to another part of that covered building or other structure; or

3)      The remodeling, removal or replacement of the portion of the undamaged part of a covered building or other structure necessary to complete the remodeling, repair or replacement of that part of the covered building or other structure damaged by a ‘Peril Insured Against’.

What does this mean for you, a home owner? 

Simply put, sometimes the enforcement of a regulation or law means taking down or removing “undamaged” stuff: like old wiring.   Recall that a homeowners (and other property) policy provides coverage when something is damaged, but doesn’t provide coverage to undamaged parts.   If your town building inspector requires you to replace undamaged (but outdated, possibly dangerous) parts by enforcing existing building codes, you’ll incur additional costs.  Since these are not included in the standard homeowner policy, the Ordinance or Law endorsement is designed to fill that gap by providing coverage for these additional costs.

Although the standard policy only provides 10% of the dwelling limit for Ordinance or Law coverage, higher limits, up to the full dwelling limit, may be added for an additional cost.

For more information about this important coverage, please contact us at www.agordon.com.