Though some Homeowners are aware that Ordinance and Law coverage is available in their policy of insurance, most do not know what additional benefits this coverage provides. So why is Ordinance or Law coverage found here with other items commonly referred to as causes of loss? The answer is this: to remind you that additional coverage might be available for your loss. Most homeowner's policies contain Ordinance or Law Coverage, O&L, but many homeowners do not avail themselves of this coverage.
O&L coverage is only triggered when the insured suffers a covered loss to the dwelling.
Ordinance or law coverage is not provided to improve the homeowner's dwelling unless a covered cause of loss takes place first. This coverage is not meant to fix damages caused by the contractor during construction. Unless you first suffer a covered cause of loss, this endorsement will not provide coverage.
The coverage is usually excluded unless endorsed in most policies. Many homeowner's policies contain the following language.
1. We do not insure for loss caused directly or indi¬rectly by any of the following. Such loss is ex¬cluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.
a. Ordinance or Law, meaning enforcement of any ordinance or law regulating the construction, repair, or demolition of a building or other structure, unless specifically provided under this policy.
Florida Statute 627.7011 requires the insurer to offer Ordinance or Law coverage.
This additional coverage is required to be offered in the amount of 25% and 50% of the Dwelling limit. This requirement only applies to all "homeowner policies". Please note the insurance company is only required to offer this coverage. The homeowner may reject this coverage by signing a written refusal.
This coverage is triggered when the insured is required to comply with a law, ordinance, statute, building code, and additional costs are incurred.
You should read the language of your policy or endorsement very carefully. Many policies only provide coverage when the increase cost you incur is due to a building code requirement enforced by your local building inspector. Not only do these code up grades have to be required by the building department, you have to actually incur the cost.
This Coverage should be considered before making any Coverage A - Dwelling settlements. Please call to discuss. On older homes especially, thousands of dollars are available under this coverage once you have reached Coverage A policy limits.