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Ordinance or Law coverage
Old 01-23-2019, 09:00 AM   #1
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Ordinance or Law coverage

Hello folks,

I just received a letter from my insurance company saying I need to select the level of Ordinance or Law Coverage to add to my existing policy (0%,10%,25%,50%). I did some quick research regarding this coverage, and think to myself 10% coverage should be adequate since my home is new (built in 2016).

I was not aware of this type of coverage before (in Oregon), is it the requirement for Florida?

What is your coverage?

Thanks.
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Old 01-23-2019, 01:21 PM   #2
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Seems like insurance companies always come up with a way to squeeze more dollars out.

Since your home is so new, that would lean towards 0% , after all how far out of code can it be, and there is no asbestos or lead paint issues.

However, what about the situation where you have a house fire in 1/2 or 2/3 the house, and the city says the remaining part must be torn down. There you would wish for this coverage.

So in your shoes, I'd go with 10%

(I'm not an insurance agent)
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Old 01-24-2019, 08:45 AM   #3
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Sunset, thanks for your suggestion.
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Old 01-24-2019, 08:59 AM   #4
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Originally Posted by neihn View Post
Hello folks,

I just received a letter from my insurance company saying I need to select the level of Ordinance or Law Coverage to add to my existing policy (0%,10%,25%,50%). I did some quick research regarding this coverage, and think to myself 10% coverage should be adequate since my home is new (built in 2016).

I was not aware of this type of coverage before (in Oregon), is it the requirement for Florida?

What is your coverage?

Thanks.
Older homes are not up to code if need to be rebuilt so level of ordinance is in order. New homes are up to code so you should be good to go. Some new homeowners fall for the level of ordinance option without researching so more money earned by your local insurance agent.
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Old 01-24-2019, 05:46 PM   #5
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Older homes are not up to code if need to be rebuilt so level of ordinance is in order. New homes are up to code so you should be good to go. Some new homeowners fall for the level of ordinance option without researching so more money earned by your local insurance agent.
I had a hailstorm ruin my roof a few years ago. My roof was 6 years old and I had replacement cost coverage, the adjuster told me to get a local contractor and get an estimate.

I went to the contractor who did my roof 6 years earlier. His estimate was much higher and I questioned him. He told me the city ordinances had changed and he had to add some things that I didn't have on my original roof, and didn't even want. My adjuster said "yes, he's right" and I got paid what it cost, darn near twice what I paid 6 years before.

I'm glad my insurance company offered ordinance & law coverage and included it in my policy. I never would have thought of it. I'm not in the insurance business, but my agent and the companies he uses have helped me through some situations that could have devastated me.

Even if you have a new house and don't think you need ordinance & law coverage now, are you going to remember in a few years when may need to? Are you going to blame your agent if they don't ask you in 5 or 10 years when there are new codes on the books?

Be glad your insurer brought it to your attention, if they didn't some people would criticize them for that too and tell you to sue your agent for not having you covered properly.

I hope that my insurer would contact me when a situation like this comes up. I can make the decision myself. Insurance companies didn't invent ordinance & law ordinances, they came up with solutions that can let the rest of us get the coverage we need to address them. It's up to us if we want them or not.

To the OP. Ask your agent what they think, better yet discuss it with a reputable contractor and ask him if there are any new codes that you need to follow.

If it raises your premium, raise your deductible a little bit to offset it, you'll be far ahead if you ever need to file a claim.
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Old 01-24-2019, 05:56 PM   #6
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I had a hailstorm ruin my roof a few years ago. My roof was 6 years old and I had replacement cost coverage, the adjuster told me to get a local contractor and get an estimate.

I went to the contractor who did my roof 6 years earlier. His estimate was much higher and I questioned him. He told me the city ordinances had changed and he had to add some things that I didn't have on my original roof, and didn't even want. My adjuster said "yes, he's right" and I got paid what it cost, darn near twice what I paid 6 years before.

I'm glad my insurance company offered ordinance & law coverage and included it in my policy. I never would have thought of it. I'm not in the insurance business, but my agent and the companies he uses have helped me through some situations that could have devastated me.

Even if you have a new house and don't think you need ordinance & law coverage now, are you going to remember in a few years when may need to? Are you going to blame your agent if they don't ask you in 5 or 10 years when there are new codes on the books?

Be glad your insurer brought it to your attention, if they didn't some people would criticize them for that too and tell you to sue your agent for not having you covered properly.

I hope that my insurer would contact me when a situation like this comes up. I can make the decision myself. Insurance companies didn't invent ordinance & law ordinances, they came up with solutions that can let the rest of us get the coverage we need to address them. It's up to us if we want them or not.

To the OP. Ask your agent what they think, better yet discuss it with a reputable contractor and ask him if there are any new codes that you need to follow.

If it raises your premium, raise your deductible a little bit to offset it, you'll be far ahead if you ever need to file a claim.
It happens. Contractors take advantage of it big time. When recent hurricanes destroyed roofs of homes , the estimate from the local contractor will be much higher than actual replacement of the damaged roofs. Contractors know residents are desperate to get their roofs fixed asap. For the time being the homes with damaged roofs are just are covered by blue tarps. Some areas are called tarp city.
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Old 01-25-2019, 06:13 PM   #7
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I agree completely.
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Old 01-25-2019, 08:20 PM   #8
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Doesn't it seem ridiculous that you'd need to buy a special rider or additional coverage to assure the policy will cover work done to current code/law? Shouldn't a customer expect that to be part of the basic policy? The insurance company, after all, is in a better position to know the rules in each area and to include that in the price of the policy. I'm sure there's a trade group/third party that keeps track of such things.
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Old 01-25-2019, 10:19 PM   #9
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^^^ Exactly, it used to be called replacement cost insurance. They replaced it even if standards have changed.
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Old 01-25-2019, 10:22 PM   #10
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Doesn't it seem ridiculous that you'd need to buy a special rider or additional coverage to assure the policy will cover work done to current code/law? Shouldn't a customer expect that to be part of the basic policy? The insurance company, after all, is in a better position to know the rules in each area and to include that in the price of the policy. I'm sure there's a trade group/third party that keeps track of such things.
The garage doors of homes built in the 1990s were built to code. If you had a home built in 2000s or 2010s the garage doors were built to a better code. In Florida it's all about hurricanes. If your home takes a direct hit from a Cat 3 or Cat 4/5 hurricane , codes are out the window since your garage door and or parts of all of your home will be destroyed. I have lived and survived direct hits hiding in the walk in closet with my family and my pit bulls but parts of my home did not. Also insurance companies and Florida residents know the replacement costs are out the window too since contractors will price gauge us to the moon since we are so desperate to get out damaged homes fixed.
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Old 01-26-2019, 03:14 AM   #11
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Quote:
Originally Posted by samclem View Post
Doesn't it seem ridiculous that you'd need to buy a special rider or additional coverage to assure the policy will cover work done to current code/law? Shouldn't a customer expect that to be part of the basic policy? The insurance company, after all, is in a better position to know the rules in each area and to include that in the price of the policy. I'm sure there's a trade group/third party that keeps track of such things.
I agree. Itís not clear why this is needed unless the basic policy does not provide adequate coverage. In Florida mitigation inspections are carried out before a home is insured, and if a home is older and was built to an older code, that will be reflected in the assessment and priced accordingly.
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Old 01-26-2019, 09:32 AM   #12
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I have replacement cost coverage and have never heard of the above coverage for my state.

If after a claim the company told me "well, we meant replacement cost under the old code standards, extra costs to meet the current building code are not covered" I'd be shopping for a lawyer.
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Old 01-26-2019, 09:53 AM   #13
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However, what about the situation where you have a house fire in 1/2 or 2/3 the house, and the city says the remaining part must be torn down. There you would wish for this coverage.
Best to check with the agent but typically demolition is already covered as part of the policy and not paid for separately. It's not part of Ordinance and Law coverage.
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Old 01-26-2019, 10:19 AM   #14
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Thanks everyone for chiming in. It seems I need to check back with my insurance company to increase the ordinance coverage when my home gets older (perhaps 5 or 6 years old)
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Old 01-26-2019, 12:09 PM   #15
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I have replacement cost coverage and have never heard of the above coverage for my state.

If after a claim the company told me "well, we meant replacement cost under the old code standards, extra costs to meet the current building code are not covered" I'd be shopping for a lawyer.
If you find a lawyer willing to take on your case if you are in that situation, please share if the law group has locations in Florida.
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