Building codes constantly change and are regularly updated. Your home may have been in total compliance with the building codes just a few years ago, but now, it may no longer meet your community’s current building codes. In fact, it is reasonable to assume that houses built more than 10 years ago likely do not comply with today’s ordinances or laws.
This is a problem because any lack of compliance, although unintentional and even unknown, could result in a major out-of-pocket expense following a major loss to your home. Your homeowners’ policy provides only a limited amount of coverage to pay any additional building or rebuilding costs caused by the building inspector’s insistence that your entire home be brought into full compliance with local building codes following a loss. Yes, the building inspector has this power.
Your homeowners’ policy provides coverage on your home; depending on your coverage additional coverage is available to cover the expense necessary to comply with local building codes. That additional coverage can cover:
- The cost to tear down the undamaged portion of the house (so the entire house can be rebuilt to code); and
- The cost to rebuild the entire house to the current building code (the damaged and undamaged parts).
By itself, this additional coverage may not give you enough coverage to accomplish both requirements. Any amount above that could have to be paid by you.
You do have the option to increase your protection and save yourself from this out-of-pocket expense. The Ordinance or Law Increased Amount of Coverage endorsement can be attached to plug this potentially expensive hole. Several levels of protection are available to meet your needs.
We feel you need to be aware of current coverage limitations common to homeowners’ policies. You also need to know that there is a way to fill this gap to protect yourself from a potentially devastating out-of-pocket expense. Give us a call at 844-GANNONS to discuss your options today!