What is Ordinance or Law Coverage?

What Is Ordinance or Law Coverage in Florida Homeowners Insurance?

Ordinance or Law Coverage helps pay certain additional costs of repairing or rebuilding damaged property when current building codes, laws, or ordinances require work beyond simply replacing the damaged property.

This coverage can become especially important for older Florida homes. A house may have complied with building codes when it was constructed, but repairing it after a hurricane, fire, water loss, or other covered event may trigger newer requirements for roofing, structural components, electrical systems, plumbing, wind resistance, or other parts of the property.

For example, a hurricane may cause damage to a covered roof. Replacing the physically damaged roofing materials may be only part of the cost. Current building codes may require additional materials, construction methods, or related work before the repairs can be legally completed.

That can create a significant difference between the cost of replacing what was physically damaged and the actual cost of completing code-compliant repairs.

Ordinance or Law Coverage may help pay qualifying costs associated with that difference, subject to the policy’s limits, conditions, and exclusions.

For Florida homeowners, Florida Statute § 627.7011 addresses replacement-cost and law-and-ordinance coverage. Depending on the coverage selected and applicable policy, law-and-ordinance benefits may be limited to a percentage of the dwelling limit.

Why Is Ordinance or Law Coverage Important in Florida?

Florida’s building requirements have changed significantly over time, particularly in areas involving roofing, wind resistance, structural connections, electrical systems, plumbing, and floodplain construction.

As a result, repairing an older Florida property after a covered loss may involve more than restoring it to its previous condition.

The local building department may require certain portions of the property to comply with current requirements before permits can be issued, inspections approved, or repairs completed.

Those requirements can substantially increase reconstruction costs.

An insurance company’s estimate may account for direct physical damage while excluding some of the additional work required to comply with current building codes. Depending on the policy, Ordinance or Law Coverage may provide additional benefits for qualifying code-related expenses.

For homeowners, the important distinction is between what must be repaired because it was physically damaged and what additional work must be performed because current law or building code requires it as part of those repairs.

Does Florida Homeowners Insurance Include Ordinance or Law Coverage?

Florida law addresses Ordinance or Law Coverage in Florida Statute § 627.7011.

Under the statute, insurers must offer certain homeowners replacement-cost coverage that includes costs necessary to comply with applicable laws and ordinances, subject to the terms of the policy and statutory requirements.

Depending on the coverage selected, law-and-ordinance benefits may generally be limited to 25% or 50% of the dwelling limit.

If the insurer does not obtain the required written rejection, a homeowners policy covering the dwelling is generally deemed to include Ordinance or Law Coverage equal to 25% of the dwelling limit. The insurer must also offer an option for coverage limited to 50%.

Homeowners should review the declarations page, endorsements, and complete policy rather than assume a particular amount of coverage applies.

The coverage limit is important because code-required work after a substantial property loss can be expensive.

Do the Same Ordinance or Law Rules Apply to Commercial Property?

Not necessarily. The provisions of Florida Statute § 627.7011 discussed above apply specifically to homeowner’s policies. Commercial property policies may contain different Ordinance or Law Coverage provisions, limits, conditions, and exclusions.

This distinction can be particularly important for older office buildings, retail properties, hotels, apartment buildings, warehouses, condominium properties, and other structures where current building requirements could significantly increase reconstruction costs after a major loss.

Commercial property owners should therefore review the actual insurance policy rather than assume that the 25% and 50% provisions applicable to homeowners coverage also apply to their property.

What Does Ordinance or Law Coverage Pay for in Florida?

The exact benefits depend on the insurance policy and the building requirements triggered by the covered loss.

Depending on the policy, Ordinance or Law Coverage may help pay for:

• Increased construction costs required by current building codes
• Demolition of undamaged portions of a structure when required by law
• Debris removal associated with required demolition
• Reconstruction of portions that must be rebuilt because of code requirements
• Required upgrades to roofing, structural, electrical, plumbing, or other building systems

Coverage is not triggered simply because a homeowner would prefer to upgrade the property during reconstruction.

The policyholder generally must establish that the additional expense qualifies under the policy’s Ordinance or Law provisions and results from requirements associated with a covered loss.

When Does Ordinance or Law Coverage Become Important?

Ordinance or Law Coverage often becomes important when repairs to older construction trigger requirements that did not apply when the property was originally built.

A hurricane may damage an older roof and trigger current roofing requirements. A fire may damage portions of an electrical system that must comply with modern standards during reconstruction. A substantial loss involving a property in a flood hazard area may trigger additional floodplain requirements.

In these situations, the insurance company’s estimate for repairing the direct physical damage may not reflect everything that must legally be done to complete the project.

The difference can become substantial on older homes and larger residential, condominium, and commercial properties.

Does Ordinance or Law Coverage Pay for Building Code Upgrades?

It can, but not every improvement made during reconstruction qualifies for coverage.

The key issue is generally whether the additional work is required by an applicable law, ordinance, or building code because of the covered loss and whether the expense falls within the policy’s Ordinance or Law Coverage.

For example, replacing an undamaged component simply because the homeowner prefers a newer version may be different from replacing or modifying that component because the building department requires the work before repairs can be approved.

This is why code-related insurance disputes often involve two separate questions:

What work does the applicable building code actually require?

And:

Does the insurance policy cover the resulting additional cost?

Establishing the first does not automatically establish the second. Both the building requirements and insurance policy must be evaluated.

Does Ordinance or Law Coverage Apply to Florida Roof Claims?

Yes, it can. Ordinance or Law Coverage may become important when a hurricane, windstorm, fire, or other covered event damages a roof, and the repair triggers compliance with current Florida Building Code requirements.

Roof claims can become particularly complicated because the extent of physical damage does not necessarily determine the full scope of repairs.

The analysis may involve the percentage of the roof requiring work, the relevant roof section, when the roof was installed or last replaced, which version of the Florida Building Code applied, whether the existing roof complied with that code, and what the local building official requires.

If code requires additional work beyond repairing the directly damaged roofing materials, the next question is whether the policy’s Ordinance or Law Coverage applies to those additional costs.

Does Florida’s 25% Roof Rule Require a Full Roof Replacement?

Not necessarily. Florida’s Building Code contains provisions commonly referred to as the 25% roof rule, but damage affecting more than 25% of a roof does not automatically require a full roof replacement.

Florida law contains an important exception for certain roofs.

Under Florida Statute § 553.844(5), if an existing roofing system or roof section was built, repaired, or replaced in compliance with the 2007 Florida Building Code or a later edition, only the portion being repaired, replaced, or recovered generally must comply with the current code.

As a result, determining whether a damaged roof must be fully replaced may require examining the roof’s permit history, installation or replacement date, applicable code edition, prior code compliance, extent of the damage, affected roof section, and requirements of the local building official.

It is also important to separate what the building code requires from what the insurance policy covers. A code requirement may establish that additional work must be performed, but it does not automatically establish that the insurer must pay for all of that work.

When code compliance increases the cost of repairing a covered roof loss, the policy’s Ordinance or Law Coverage limits, and other applicable provisions may determine whether those additional costs are covered.

Can an Insurance Company Refuse to Pay for a Full Roof Replacement Based on the 25% Rule?

Yes. An insurance company may dispute whether Florida’s 25% roof rule or another building-code requirement actually requires a full roof replacement. However, the 25% threshold alone does not determine what the insurer must pay.

Whether a complete replacement is required depends on the percentage of the roof that needs repair, what constitutes the applicable roof section, when the roofing system was installed or replaced, which version of the Florida Building Code applies, and whether the existing roof qualifies for an exception under Florida law.

The roof’s permit history and requirements imposed by the local building official may also become important when the insurer and policyholder disagree on the scope of necessary repairs.

Even when the building code requires additional roofing work, a separate question remains: does the insurance policy cover the increased cost of complying with that requirement?

That is where Ordinance or Law Coverage may become important. If a covered roof loss triggers code-required work beyond the direct repair of the damaged area, the policy’s Ordinance or Law provisions, coverage limits, and other terms may determine whether the insurer is responsible for those additional costs.

A full roof replacement dispute should therefore not be decided solely on whether more than 25% of the roof is damaged. The physical damage, applicable building code, roof history, local requirements, and insurance policy must be evaluated together.

What Does the 50% Rule Mean for Florida Property Insurance Claims?

The term “50% rule” can refer to different requirements in a Florida property damage claim.

That distinction is important because one 50% threshold may apply to floodplain and substantial-damage requirements, while another applies to homeowners insurance and Ordinance or Law Coverage.

They are not the same rule.

The 50% Substantial-Damage Rule

For certain properties in flood hazard areas, substantial-damage requirements may apply when the cost of restoring a damaged structure equals or exceeds 50% of the building’s pre-loss market value.

A substantial-damage determination can trigger current floodplain and Florida Building Code requirements.

For Tampa and Hillsborough County property owners, this issue can become particularly important after hurricanes, storm surge, flooding, fires, or other substantial losses.

A 50% determination does not automatically mean the property must be demolished. What must be done can depend on the property’s location, flood zone, elevation, applicable building requirements, and determinations made by local building officials.

The Separate 50% Threshold Under Florida Insurance Law

Florida Statute § 627.7011 contains a separate 50% threshold associated with homeowners Ordinance or Law Coverage.

Under the statute, additional law-and-ordinance coverage generally applies to repairs of the damaged portion of the structure unless the total damage exceeds 50% of the structure’s replacement cost.

This insurance provision should not be confused with a floodplain substantial-damage determination.

The distinction is significant: one issue concerns what work applicable law or building codes require, while the other concerns insurance coverage for qualifying code-related costs.

How Much Ordinance or Law Coverage Should a Florida Homeowner Have?

The appropriate amount depends on the property and the potential cost of complying with current building requirements after a major covered loss.

Factors may include the home’s age, construction type, roof age, location, flood zone, replacement cost, existing code compliance, prior renovations, and the potential cost of required upgrades.

For example, if a home has a $400,000 dwelling limit, Ordinance or Law Coverage equal to 25% of that amount could provide up to $100,000 in coverage for qualifying expenses, subject to the terms and limitations of the policy. A 50% limit could provide up to $200,000.

That does not mean the insurer automatically pays the full Ordinance or Law limit after a loss.

The policyholder must still establish qualifying expenses under the policy, and the amount payable depends on the actual covered costs and applicable terms.

Reviewing this coverage before a loss occurs can help homeowners understand whether a substantial code-related expense could exceed the available insurance limit.

Who Should Consider Higher Ordinance or Law Coverage?

Owners of older Florida properties may want to pay particular attention to the amount of Ordinance or Law Coverage available under their policies.

The coverage can be especially significant for older Tampa and Tampa Bay homes, coastal properties, properties in flood hazard areas, older roofing systems, condominium buildings, commercial properties, and buildings that have undergone multiple additions or renovations.

Generally, the greater the difference between a property’s existing construction and current requirements, the greater the potential for code-related costs after a substantial loss.

Homeowners concerned about whether their existing limit is adequate should discuss available coverage options with a qualified insurance professional before a loss occurs.

What Does Ordinance or Law Coverage Not Pay For?

Ordinance or Law Coverage does not automatically pay for every improvement or upgrade made during reconstruction.

Depending on the policy, coverage may not apply to voluntary upgrades, routine maintenance, work unrelated to the covered loss, certain pre-existing code violations, improvements not actually required by current law or code, damage caused by an excluded peril, or expenses exceeding the available coverage limit.

The specific policy language controls.

A central question is whether the additional expense results from a law, ordinance, or building-code requirement triggered in connection with the covered loss and falls within the policy’s coverage.

If the work is optional, unrelated to the covered damage, or otherwise outside the policy’s terms, Ordinance or Law benefits may not apply.

How Long Do I Have to Report Additional Code-Related Costs?

Florida property insurance claims are subject to statutory notice deadlines.

Under Florida Statute § 627.70132, an initial or reopened property insurance claim is generally barred unless notice is provided within one year after the date of loss. A supplemental claim is generally barred unless notice is provided within 18 months after the date of loss.

These deadlines can become particularly important with Ordinance or Law Coverage because some code-related expenses may not become apparent until contractors begin developing the repair scope, permits are sought, inspections occur, or building officials identify additional requirements.

Policyholders should therefore promptly notify the insurance company when additional code-required work or related costs are identified, rather than waiting until reconstruction is complete.

Can a Florida Property Insurance Lawyer Help with an Ordinance or Law Coverage Dispute?

Yes. Ordinance or Law disputes can involve both the interpretation of the insurance policy and technical questions about what applicable building codes require.

A Florida property insurance lawyer can review the policy, insurer’s estimate and coverage position, permits, applicable code provisions, contractor findings, engineering reports, and building department documentation to identify why the code-related expense is being disputed.

The disagreement may involve whether the work is actually required, whether the requirement resulted from the covered loss, whether the policy provides coverage, how much Ordinance or Law Coverage is available, or whether the insurer incorrectly treated mandatory work as a voluntary improvement.

When necessary, an attorney can also work with contractors, engineers, architects, roofing professionals, and other qualified experts to document the repair requirements and develop evidence supporting the claim.

Why Choose Williams Law Association, P.A. for an Ordinance or Law Coverage Dispute?

Williams Law Association, P.A. has represented Florida policyholders in property insurance disputes since 1995. We represent policyholders, not insurance companies.

Code-required repairs can add substantial costs after a hurricane, fire, roof loss, water loss, or other covered event. When those expenses are excluded from an insurer’s estimate, the policyholder may face a significant difference between the insurance payment and the actual cost of completing legally required repairs.

Our attorneys can review the complete policy, available Ordinance or Law Coverage, repair estimates, permits, building-code requirements, expert findings, and insurer communications to determine what work is required, what the policy covers, and why the insurer has refused to pay the disputed amount.

When the dispute requires technical evidence, we can work with appropriate engineers, contractors, roofing professionals, architects, building consultants, and other qualified professionals to evaluate the loss and code requirements.

If your insurance company has refused to pay for code-required repairs or has substantially underpaid an Ordinance or Law claim, Williams Law Association, P.A. can review the dispute and determine what options may be available to pursue additional insurance benefits.

Speak With a Florida Property Insurance Lawyer About Code-Required Repairs

A covered property loss can become significantly more expensive when current building requirements affect how the property must be repaired or rebuilt.

If your insurer’s estimate does not include code-required repairs, disputes whether particular work is required, or refuses to provide benefits under your Ordinance or Law Coverage, the difference can represent a substantial portion of the actual reconstruction cost.

Williams Law Association, P.A. offers free consultations for Florida property insurance claims. Contact our firm to have your policy, claim, and disputed code-related repair costs reviewed by a Florida property insurance lawyer.