Almost every Florida insurance policy will have something similar to this following the declarations page:
LAW AND ORDINANCE: LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE THAT YOU MAY WISH TO PURCHASE. PLEASE DISCUSS WITH YOUR INSURANCE AGENT.
After the storms hit across Florida in 2005 and 2006, The Florida legislature passed legislation to mandate Ordinance or Law coverage of at least 25% be offered. Florida statute 627.7011 requires all admitted Homeowners insurance carriers in Florida to offer both 25% and 50% Ordinance of Law options. Some insurance carriers offer an additional percentage option of 10% but that requires a written request by the insured. The only policy forms that are required to offer this coverage are homeowners forms HO3 and HO6. That means owner occupied single family, town house or condominiums homes.
What is meant by 25% and 50%? The Ordinance or Law coverage limit is represented as a percentage of what your home is insured for also referred to as Coverage A. So, if you purchase 25% Ordinance or Law coverage and your Coverage A is $200,000 then you would have $50,000 dollars available for Ordinance or Law coverage.
This does not mean Ordinance or Law coverage is included in your policy. It simply means the insurance company must offer it to you. For you to have this coverage you must elect it at an additional cost.
Ordinance or Law can be a key component when your home is damaged. This coverage kicks in as follows: to cover the costs of bringing your house up to code; demolition costs to the undamaged portion of your home, increased construction costs and to cover the cost to bring you home up to code as required by your local city our county. You should consult with your insurance agent and read your policy for a full explanation of what is covered.
Do you need it? You home insurance is designed to cover the costs associated with replacing your home if a total loss or repairing you home is partially damaged as it was before the damage. It does not cover the coast of bringing your home up to current building code or other building code related requirements. These costs can add up quickly!
For example, your local city our county may require the total demolition of your home if it sustains damage greater than or equal to 50% of the home in addition to bringing your entire home up to current building codes. Without Ordinance or Law coverage you will be responsible for these costs. What type of codes would require updates? Some examples would include your electrical box, heating, cooling, hot water heater, ventilation systems, windows, doors, roof, and possibly your foundation.
This type of situation can come up with homes of all ages, but certainly for older homes not built to current building standards and requirements, so it is our recommendation that homeowners carry this coverage. The cost is very affordable, so why leave yourself uncovered? We can help you determine the right percentage and answer any questions you might have. Just give us a call and we will be happy to help or Click Here to send us your question.