What is Building Ordinance coverage?

This coverage is typically a cap (also called a sub-limit in insurance speak) on the amount an insurance company will pay out related to things required after a claim due to building ordinances. One area this comes into play is things that a new home would have to have that the original home did not due to changes in the building code between the time the home was first built and when it is being rebuilt after a claim. A common of example of this in Southern California is interior fire sprinklers, where most counties are requiring that new homes have interior fire sprinklers. If your prior home did not have interior fire sprinklers, the increased cost to add them to the new home would fall under the Building Ordinance coverage and erode that cap. There are other subtle ways this coverage could come into play as well, but the upgrades due to new building codes are what people commonly associate with this coverage. Having a higher limit on this coverage becomes even more important the older a property is, because there will be more differences in building code requirements from the time the property was originally built.

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