Last week, I discussed the importance of Ordinance and Law Coverage for older buildings. Click here to read the article.

As I mentioned in my previous entry, Ordinance and Law Coverage has three basic parts. The specific coverages provided under this endorsement are:
 
Coverage A - Loss to the Undamaged Portion of the Building - If part of the building is not damaged by an insured peril but needs to be destroyed before the building can be repaired due to an ordinance, then the undamaged portion of the building is declared as damaged and is covered under the original building limit on the policy.
 
Coverage B - Demolition Cost Coverage - This coverage will pay the cost of demolishing the undamaged part of the structure and clearing the site so work can begin on the new building. 
 
Coverage C - Increased Cost of Construction - This coverage will pay for the increased cost to repair or replace the damaged building at the minimum requirements of today's current building laws or ordinance requirements.
 
Coverage A is included in the building limit of the insured building.  However, Coverages B & C must be determined, so you will need to evaluate what limits of insurance you may need to purchase.  A local builder, inspector,  or engineer may be be an excellent reference to help assist you in deciding on the limits you should consider
 
If you'd like more information or have any questions, feel free to email me at davidd@lymansheets.com anytime.

Dave Drayton has been with Lyman & Sheets since 1981, and has more than 27 years of risk management, insurance operations and sales experience. Email Dave at davidd@lymansheets.com or connect with him on LinkedIn.