Everyone in Florida knows about the cost of hurricanes. Every homeowner also knows about the building code. What every homeowner doesn’t know is that the building code is frequently changing. Just because your home may have been “up to code” when it was built, doesn’t mean it is now.
This is where Ordinance & Law (O/L) coverage on your homeowner’s insurance policy comes in. While the standard policy includes 25% O/L coverage, we recommend 50%. This is true for several very important reasons:
Ordinance and Law coverage is most important in the event of a very serious claim, and there are two aspects to this coverage. The first involves requirements from the building department. In the event of a loss, they may require updates to your home so that it conforms to the current Florida Building Code. The standard homeowner’s policy covers restoring your home to how it is built today. Any additional requirements to build it up to current code would require O/L coverage. These costs may or may not exceed that 25% coverage.
Perhaps more important than restoration to code is this second reason we recommend 50% Ordinance and Law. If, in the course of events, your home is damaged more than 50%, the building department may require that your home be torn down entirely – even if it’s not 100% damaged or the damage is repairable. As we mentioned earlier, your insurance policy only covers to repair your home as it is built today and does not include any code upgrades that may be required. As such, most homeowners cannot afford to rebuild if their home was completely torn down – ordinance and law coverage pays to teardown and rebuild the undamaged portion of your home.
This is why we recommend increasing Ordinance & Law coverage from the standard 25% to 50%. We understand this is a complicated concept. If you don’t understand it or would like more information, please call us. We are happy to discuss.
If you want to increase your coverage or ensure you have enough coverage, please also give us a call, we are always here to help.