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What is Ordinance or Law Coverage?

Ordinance or Law Coverage is additional property insurance coverage that pays for the increased costs of rebuilding or repairing your property to meet current building codes and ordinances. When a covered loss damages your home or commercial building, this coverage bridges the gap between what your standard property insurance pays and what you actually need to bring your structure into compliance with today’s building requirements.

Florida property owners often discover they need this coverage only after filing a claim when they learn their standard homeowners or commercial property policy won’t cover the full cost of mandatory building code upgrades.

Why Ordinance or Law Coverage Matters in Florida

Florida has some of the strictest building codes in the nation, particularly after major hurricanes, such as Andrew, prompted comprehensive code reforms. If your property was built before these updated codes took effect, you’re sitting on a potential coverage gap that could cost tens of thousands or even hundreds of thousands of dollars.

When a covered loss damages 50% or more of your building’s value, Florida building codes often require you to bring the entire structure up to current code, not just repair the damaged portion. Without Ordinance or Law Coverage, your standard property insurance policy typically only pays to rebuild your property as it existed before the damage, leaving you responsible for costly mandatory upgrades.

What Does Ordinance or Law Coverage Pay For?

This specialized coverage typically includes three distinct components:

Coverage A: Loss to the Undamaged Portion

When building codes require you to demolish undamaged parts of your structure to comply with current ordinances, Coverage A pays for the value of that undamaged portion you’re forced to tear down.

Example: Hurricane damage affects 55% of your building. Local ordinances require you to demolish the entire structure and rebuild it to current code standards. Coverage A pays for the loss of the remaining 45% that wasn’t damaged by the hurricane.

Coverage B: Demolition Costs

This covers the cost of demolishing and clearing away the undamaged portion of your building that must be removed to comply with current laws.

Example: Demolition costs $25,000 to tear down your building and haul away debris. Coverage B pays these demolition and debris removal expenses.

Coverage C: Increased Cost of Construction

This is typically the most significant component, which pays the additional costs required to rebuild your property to meet current building codes and ordinances.

Example: Your damaged building can be rebuilt “as it was” for $200,000, but bringing it up to current Florida Building Code requirements costs $315,000. Coverage C pays the $115,000 difference.

Common Building Code Upgrades That Trigger This Coverage in Florida

Florida property owners frequently encounter these mandatory upgrades when filing insurance claims:

Hurricane-Resistant Features:

  • Impact-resistant windows and doors
  • Reinforced roof decking and upgraded roof-to-wall connections
  • Enhanced wind-resistant roofing materials
  • Shutters or impact glass for window protection

Electrical System Upgrades:

  • GFCI outlets in bathrooms, kitchens, and exterior areas
  • AFCI breakers for bedroom circuits
  • Upgraded electrical panels to meet current load requirements
  • Replacement of aluminum or outdated wiring

Plumbing Code Compliance:

  • Replacement of polybutylene pipes
  • Installation of backflow prevention devices
  • Upgraded fixtures to meet water conservation standards

Structural Requirements:

  • Foundation reinforcement for flood zones
  • Elevation requirements in coastal areas
  • Seismic strapping (in certain regions)
  • Fire-resistant construction materials

Energy Efficiency Standards:

  • Updated insulation requirements
  • Energy-efficient HVAC systems
  • Low-E windows and improved building envelope

Do I Need Ordinance or Law Coverage?

You likely need this coverage if:

  • Your property was built more than 20 years ago
  • Your property is located in a coastal area subject to strict wind and flood codes
  • You have a substantial mortgage and can’t afford significant out-of-pocket expenses for code upgrades
  • Your property hasn’t been renovated to meet the current Florida Building Code
  • You own commercial property in an area with stringent commercial building ordinances
  • Your property is in a historic district with special preservation requirements

Many Florida property owners assume their standard insurance covers code upgrades. This dangerous misconception has left countless policyholders facing financial hardship after major claims.

How Much Ordinance or Law Coverage Should I Carry?

The answer depends on your property’s age, location, and current code compliance status. Insurance carriers typically offer Ordinance or Law Coverage as a percentage of your dwelling coverage, commonly at rates of 10%, 25%, or 50%.

For most Florida properties built before 2002 (when the current Florida Building Code was adopted), experts recommend carrying at least 25% Ordinance or Law Coverage. Older properties, particularly those built before the 1994 Hurricane Andrew building code reforms, may require insurance coverage limits of 50% or higher.

Consider this scenario:

  • Dwelling coverage: $400,000
  • 25% Ordinance or Law Coverage: $100,000
  • Total available for code compliance: $100,000

If mandatory code upgrades cost $150,000, you’d still face a $50,000 shortfall. Work with your insurance agent to assess your specific risk and ensure adequate protection.

What Doesn’t Ordinance or Law Coverage Pay For?

Understanding the exclusions is just as important as knowing what’s covered:

  • Voluntary upgrades beyond what’s required by law
  • Code violations that existed before the loss (though some policies cover these)
  • Routine maintenance or repairs unrelated to bringing the property to code
  • Landscaping or exterior improvements not mandated by building codes
  • Business interruption costs while upgrades are completed (this requires separate coverage)
  • Code upgrade requirements triggered by voluntary renovations rather than covered losses

The 50% Rule: A Critical Florida Consideration

Florida and many local jurisdictions enforce a “50% rule”. If damage exceeds 50% of your building’s value, you must bring the entire structure into compliance with current building codes, even if this means replacing or upgrading undamaged portions.

This rule can transform a partial loss into a total loss situation from a compliance standpoint. Without adequate Ordinance or Law Coverage, property owners face devastating out-of-pocket costs.

Real-world example: Your home is valued at $300,000. Hurricane damage totals $160,000 (53% of the value). Local building officials require you to bring the entire house up to current code, including new roof installation methods, impact-resistant windows throughout, updated electrical systems, and reinforced connections.

Total rebuild cost: $425,000. Your standard policy pays $160,000 for damage. Without Ordinance or Law Coverage, you’re personally responsible for the additional $265,000.

When Should You Review Your Ordinance or Law Coverage?

Review your coverage in these situations:

  • After purchasing an older property
  • When building codes change in your area (particularly after major hurricanes)
  • Before hurricane season begins
  • After your property value increases due to market appreciation
  • When you receive your annual policy renewal
  • After completing renovations that increased your property’s value

Common Insurance Company Tactics to Avoid Paying Ordinance or Law Claims

Even when you have Ordinance or Law Coverage, insurers may attempt to minimize payouts through:

  • Underestimating damage severity: Adjusters may claim damage is below the 50% threshold to avoid triggering mandatory code compliance requirements.
  • Disputing code applicability: Insurance companies may argue that certain code upgrades aren’t actually required for your specific situation.
  • Challenging the scope of required upgrades: Insurers might claim only minimal code compliance work is necessary when comprehensive upgrades are actually mandated.
  • Policy interpretation disputes: Companies may interpret coverage language narrowly to exclude certain code-related costs.
  • Delaying building department consultations: Some insurers delay engaging with building officials to determine required code upgrades properly.

The Cost of Ordinance or Law Coverage vs. The Risk of Going Without

Many property owners skip Ordinance or Law Coverage because it increases their premium (typically by 5-15%) annually, depending on coverage limits and property characteristics.

Consider the risk:

  • Average premium increase for 25% Ordinance or Law Coverage: $150-$400 annually
  • Average code compliance costs after major damage: $50,000-$200,000+
  • Financial exposure without coverage: Complete out-of-pocket responsibility for all mandatory upgrades

For less than $1 per day in most cases, you can protect yourself from potentially catastrophic expenses. The question isn’t whether you can afford this coverage; it’s whether you can afford not to have it.

Florida-Specific Ordinance or Law Coverage Considerations

  • Hurricane Building Code Evolution: Florida’s building codes have evolved significantly since Hurricane Andrew in 1992. Properties built before major code revisions face the highest exposure to mandatory upgrade costs.
  • Coastal Construction Requirements: Coastal properties face additional ordinances related to flood zones, elevation requirements, and wind resistance standards that inland properties don’t encounter.
  • Local Ordinance Variations: While the Florida Building Code provides statewide minimum standards, local jurisdictions can impose more stringent requirements. Miami-Dade and Broward counties, for example, have some of the strictest codes in the state.
  • Sinkhole-Prone Areas: Properties in sinkhole-prone regions may face specialized foundation and structural requirements when filing damage claims.
  • Historic Property Considerations: Historic properties may need to meet preservation requirements in addition to standard building codes, creating unique compliance challenges.

Why Legal Representation Matters for Ordinance or Law Claims

Ordinance or Law Coverage claims present unique challenges:

  • Technical complexity: Understanding building codes, compliance requirements, and how they interact with insurance policy language requires specialized knowledge.
  • High financial stakes: Code compliance costs often exceed the original damage costs by substantial margins.
  • Insurance company resistance: Insurers know these claims are expensive and frequently dispute coverage or underpay claims.
  • Engineering and expert needs: Many claims require engineers, code consultants, and construction experts to document required upgrades properly.
  • Deadline pressures: Florida’s statute of limitations for property insurance claims creates time constraints that favor insurance companies over property owners.

At Williams Law Association, P.A., our attorneys have helped Florida property owners recover millions in denied, delayed, and underpaid Ordinance or Law Coverage claims. We understand Florida’s building codes, how insurance policies address code compliance, and the tactics insurers use to minimize legitimate claims.