Ordinance or Law Coverage

Standard policies cover buildings for replacement cost or actual cash value (replacement cost less depreciation). However, it may not be possible to rebuild to the same condition as existed prior to damage, because of changes in building codes, zoning codes, or other laws regulating construction. Examples would include upgraded wiring requirements, floodproofing requirements, or in the case of commercial buildings, requirements of the Americans with Disabilities Act or requirements for sprinkler systems. Ordinance or law coverage can cover

• loss of value of the undamaged portion of the building
• the undamaged portion may now be prohibited from its former use
• it may have to be upgraded even though it was not damaged
• costs of demolition of the undamaged portion of the property
• increased cost to repair or rebuild the damaged portion