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The ordinance or law coverage, also known as building code upgrade coverage, refers to a provision within a policy that includes the additional costs to comply with applicable regulations when carrying out repairs or reconstruction after a covered loss.
When a property is damaged or destroyed, the cost of repairing or rebuilding must comply with current building codes, zoning laws, or ordinances. These codes or ordinances must be adhered to even if they were not in place when the home was originally built.
Expenses that this clause may cover include demolition, debris removal, updates to building codes, and other costs associated with complying with local laws.
At PSIC, ordinance or law coverage protects policyholders in the event they need to repair or rebuild their home after a covered loss. It ensures that owners are financially protected from the additional costs associated with complying with local building codes or ordinances.
With this endorsement, you will be protected if the covered loss affects your main dwelling, also known as coverage A, or any other structure (such as a detached garage or a shed), alternatively referred to as coverage B.
When a property is damaged or destroyed, the reconstruction must comply with current building codes, zoning laws, or ordinances. This can result in an increased cost of construction, as these regulations may have changed.
In other words, if you have to replace or rebuild your home and there are new mandatory codes or ordinances that you need to comply with, incurring additional costs, this addendum helps cover those expenses.
These terms might be similar or associated with the term you have read before.
At PSIC, we consider that they can be helpful for you.
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Last updated: June 27, 2023
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