Are you an owner of an older commercial building or home? If so, a normal Basic Form, Broad Form or Special Form policy designed to replace the property should it be destroyed will probably not cover all your costs. That is because legal requirements passed since the building was first constructed require that stronger and safer materials and more accessible design features be used. This likely will cost more and take longer than covered by the basic policy.

Basic property insurance policies often exclude costs incurred complying with new building codes or ordinances. You should close this gap in insurance coverage by adding “ordinance or law” coverage. You may add ordinance or law coverage to your commercial building policy by including endorsements for: 1) upgrading the building as required by ordinance or laws and 2) covering additional loss of income during the increased time it takes to bring the building into compliance with new ordinances or laws. I highly recommend business owners who own older properties add both of these endorsements.

As a California homeowners it might be necessary for you to do the same. Some of your policies do not include building code upgrade (ordinance or law) coverage.

Various laws may come into play when your building is damaged. The repair and/or rebuilding may have to conform to standards more stringent than when it was first built, such as local, county, state, and federal regulations. There may be restrictions by Homeowners Associations, historical societies and others. Additionally, sometimes there are requirements that a building with significant damage must be demolished instead of repaired. If you know these things upfront you can prepare for them. Your Public Adjuster can help.

Insurance companies and their agents often do not offer ordinance or law coverage unless you specifically ask for it. The company attitude is that the property should have been upgraded throughout the years, although that is rarely the case. The insurance companies offer ordinance or law endorsements that provide the coverage you need. Your Public Adjuster will provide an audit of your coverage to help you understand if you need them.

Property Negotiation hint: Public Adjuster John Morgenstern’s 1st aim is to get the claim granted! Contact California Public Adjuster John Morgenstern.