What is Ordinance or Law Insurance Coverage and why is it important to include in a property insurance policy?

Ordinance or Law Coverage, also known as Law & Ordinance insurance coverage, is an important aspect of property insurance. This type of coverage addresses the additional costs that a property owner might incur when rebuilding or repairing a structure after a covered loss, due to the enforcement of building codes or ordinances.

Here's why it's important:

Compliance with Current Building Codes: Building codes and requirements can change over time. If a property is damaged and needs repairs or rebuilding, the current codes may require more costly materials or methods than were used in the original construction. Law & Ordinance coverage helps pay for these additional costs.

Coverage for Demolition and Rebuilding: Sometimes, local laws require demolition of the undamaged part of a building if a certain percentage is damaged. This coverage helps pay for the demolition and the rebuilding of the undamaged parts of the property that had to be destroyed because of such ordinances.

Historical or Specialized Buildings: For properties with historical value or specialized structures, meeting the current codes might involve special materials or construction techniques, which can be more expensive.

Protection against Partial Losses: Even if the property doesn't need to be completely rebuilt, minor damages might require updates to electrical, plumbing, or structural elements to comply with current laws, which can be costly.

In summary, Law & Ordinance coverage is important because it protects property owners from the unexpected extra costs associated with rebuilding or repairing to current building standards after a loss. Without this coverage, property owners might face significant out-of-pocket expenses to bring a damaged property up to current codes.

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**DISCLAIMER: THIS IS NOT LEGAL ADVICE. USE AT YOUR OWN DISCRETION. THIS VIDEO INCLUDES MICHIGAN INFORMATION ONLY.

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