Ordinance and Law

A client sent us the following email recently-

"I accidentally picked up my Homeowners Policy (Good gosh…not to read it) and there it was in BIG BOLD Letters….IMPORTANT: ORDINANCE & LAW COVERAGE IS A PART OF THIS POLICY!   Why the shout out from my insurance company?"

First, your Homeowners Policy provides coverage which has the intent to rebuild or repair a damaged structure and return it to the state in which it existed prior to the loss caused by a covered peril. This coverage is not intended to pay all of the costs to update the structure so that it complies with current building and zoning laws, codes and ordinances.

This becomes a particular issue when a structure is substantially, but not completely, destroyed and when the undamaged portion of the structure requires extensive renovation to comply with current building and zoning laws, codes and ordinances.

The Florida Building Code that went into effect in March, 2002 substantially changed how homes are constructed from the concrete and reinforcement steel to the roof covering.  If your home was permitted for construction prior to March, 2002, many aspects probably do not meet code.  In most counties, “When repairs and alterations amounting to more than 50% of the value of the existing building are made during any 12-month period, the building or structure shall be made to conform to the requirements for a new building or structure or be entirely demolished.”

Without adequate Ordinance & Law coverage, you would be responsible for the cost of demolishing the rest of the structure, the removal of that debris, and for the cost to rebuild the undamaged portion of the house. You can easily imagine those kinds of costs running into the tens of thousands, or even more. Ordinance or Law coverage is designed to help fill that gap.

Ordinance & Law coverage can come into play on smaller damages as well. A storm may damage a portion of your roof, which would be covered by your Florida homeowners policy after your deductible. But building regulations in your area might require that the entire roof be retrofitted with tie-downs or even replaced to meet new hurricane resistance standards. These upgrades, even though they are required by law, are regarded as home improvements by your home insurance and are not covered. Without ordinance or law coverage, you will pay the difference out of your pocket. Ordinance & Law coverage will fill the gap, helping you to bring your house up to code.

Typically, the HO3 Homeowners Policy Form includes Ordinance & Law coverage for 10% of the building coverage.   However, some companies do not include O&L coverage and it must be purchased as an endorsement. Other carriers offer 25% and 50% O&L coverage. This coverage is not expensive.  You should discuss this matter very thoroughly with us. Be prepared for whatever life throws at you.

We at Dockside Insurance understand property values, Building Codes and how to apply Ordinance & Law coverage.   Call us at 727-475-7788 for a competitive insurance proposal. We are a local agency with access to big markets. We provide auto insurance, homeowner's insurance, boat insurance, flood insurance, and business insurance for our clients throughout Florida.