In the second part of our “Diving Deep: Building Ordinance & Law” series, I’d like to focus our attention on Coverage B of this form – Demolition Coverage. As a reminder, Building Ordinance and Law Coverage is an option for property insurance. A standard property insurance policy replaces the damaged property with the same or similar property. If a structure was built a long time ago, building a similar structure as a replacement may not satisfy new local regulations. Building a new structure that meets modern environmental standards, and standards for protection against disasters such as hurricanes, will cost additional money, which Building Ordinance or Law Coverage provides.
Coverage B specifically references the cost to tear down and remove the remaining undamaged portion of your building(s). Take our example from last week, where a fire destroys ¾ of your building, leaving ¼ undamaged. Where Coverage A pays for the cost to rebuild your building to new standards, you will first need to demolish and remove the undamaged portion in order to do so. This is where Coverage B kicks in. It will allow you to begin the process of bringing your building back to the standard you are accustomed to.
One thing to keep in mind here is not only that you have this coverage, but also that you have the appropriate amount of coverage. One claim that sticks out in Florida’s history as it relates to this dates back to 2004. The insured had $250,000 worth of Building Ordinance and Law coverage on their insurance policy – thinking this was more than enough to coverage any potential claim. Come to find out… Hurricanes Frances and Jeanne left this insured with a $7 million gap of uncovered Building Ordinance & Law coverage. Don’t let this be you. Connect with one of our consultants today to ensure you are not only carrying this ever important coverage, but also that you have enough coverage for your exposure!
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Written by Robbie Korth
If you have any questions, please feel free to contact Robbie Korth at firstname.lastname@example.org