In the wake of Hurricane Michael, we have seen many policyholders asking about ordinance and law coverage. Ordinance and law coverage is insurance coverage for loss caused by the enforcement of ordinances or laws regulating construction and repair of damaged buildings. As many of you know, building codes often require homeowners—when making repairs after a storm—to bring the building (as it is commonly referred to) “up to code.” Meaning, the Florida Building Code and/or local ordinances may require the homeowner or contractor to include in the repairs plans to update certain systems like windows, doors, electrical, plumbing, roof or HVAC before the local building department will issue a permit for the repairs. Upgrading these systems can vastly increase the cost for repair and reconstruction.
Before Hurricane Andrew Law and Ordinance Coverage Was Typically Excluded
When Hurricane Andrew devastated a substantial portion of the Florida coast in 1992, many homeowners found they could not afford to repair or reconstruct their homes to bring them up to code without law and ordinance coverage to help cover the necessary upgrade costs. At the time of Hurricane Andrew, many insurance policies contained an exclusion for law and ordinance coverage. Meaning, repairs needed to upgrade the building to meet code were excluded and not covered.
The 1993 Statute Requiring the Offer of Law and Ordinance Coverage
As a result, in 1993, the Florida Legislature enacted Florida Statute § 627.7011 which demanded insurance companies make law and ordinance coverage available in all homeowner's insurance policies in Florida. Now, law and ordinance coverage must be offered for either 25% or 50% of the coverage limit on the dwelling. In order to decline law and ordinance coverage, the policyholder must do so in writing. The offer for law and ordinance coverage must be made at the time the policy is issued, at the time of the first renewal, and every three years after.
Do You Have Law and Ordinance Coverage?
If you filed a claim for Hurricane Michael damage and you have law and ordinance coverage, you may be entitled to additional coverage to cover the cost of making necessary upgrades to ensure your dwelling meets the Florida Building Code and local ordinances. Do you know if your policy includes law and ordinance coverage? If you do not know or if you have any questions about your coverage or insurance claim, feel free to contact us at any time for a no-cost, no-obligation policy review so we can review your coverage and advise you of your rights.