Law and Ordinance Property Insurance Coverage

Commercial property owners, along with residential property owners, may benefit from carrying law and ordinance insurance coverage. Law and ordinance coverage protects property owners who have sustained damage from the additional costs associated with new building code requirements.

When Might You Use Law and Ordinance Coverage?

Law and Ordinance insurance coverage covers losses sustained by the enforcement of local ordinances or laws that regulate the construction or repair of damaged buildings. It can be valuable because regulations that were enacted after a building’s original construction may require that the building be brought up to the current building code when repairs are completed. Specific circumstances when this coverage could be beneficial include:

  • A partially undamaged building: Even if your covered building has sustained major damage, there is a chance that at least some portion of the building will remain undamaged. For example, a fire may start and burn around 60% of the building before it is stopped. In many Florida municipalities, the authorities will require the owner to demolish the remaining, still undamaged, portion of the building. Many locations have laws that state that if a certain percentage of a structure is damaged, the entire structure must be torn down. In this situation, your law and ordinance coverage could protect you and ensure that are adequately covered. For example, the costs associated with the process of demolishing the undamaged portion of the building would be covered by your law and ordinance policy.
  • Increased expenses: If your property is older, there is a fairly decent chance that it will not meet the current building code for new buildings. This could be critically important because the cost to rebuild the structure may be higher than the policy limit. This is especially important for commercial properties, since the building and safety compliance codes are updated more frequently. It is possible that a commercial property will need several expensive code-compliance-related modifications when it is rebuilt.

What if a Dispute Arises?

If you believe that you are entitled to more than the insurance company is offering, you should contact an experienced property insurance dispute attorney as soon as possible. Many property insurance disputes arise over law and ordinance coverage because there are disagreements over when exactly the coverage is triggered. Generally, law and ordinance coverage limit will be determined as a percentage of the total value of the covered building’s policy limit. Under Florida law, you can generally purchase coverage for up to 25 percent of the policy limit for the building.

Contact An Experienced Attorney

The experienced property insurance attorneys at Geyer Fuxa Tyler can help you with any aspect of your property insurance dispute. Please do not hesitate to contact our Sunrise office today to schedule a free evaluation of your case. Our team proudly serves property owners in Fort Lauderdale, Broward County and throughout Florida.

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