What is Ordinance and Law and why does it matter in insurance?
Ordinance and law coverage is what kicks in on an insurance policy to help cover repairs needed because they are mandated by the city or town where you live after you have a loss. So what does that mean? Let’s say you have a fire in your kitchen and you now need to repair or replace the wiring in the house. Prior to the fire, your wiring went through a fuse box, however, your city no longer allows fuses and you have to replace it with a circuit breaker box. The problem is, the damage was done to the kitchen wiring, not the basement fuse box, but the city says because of an ordinance or law, you now need to upgrade the fuse box. Normally speaking, insurance companies look at these situations and say “we don’t have to pay for that because the fuse box or other wiring wasn’t damaged in the claim”. But, when you have ordinance and law coverage, the policy says that even though it was not damaged we will pay and actually put you in a better position than you were prior to the loss. So, long story short, your insurance coverage is going to pay for that upgrade because the city, village, etc., ordinance and laws require it.
Is Ordinance and Law typically covered in a homeowner’s policy?
Ordinance and Law is typically included in homeowners policies. What is not certain, however, is the amount of coverage. The state of Wisconsin requires that insurance companies have some sort of coverage, a minimum of 10 percent, generally speaking, built into the policy (that’s 10 percent of the value of the home). So if you have a $200,000 house, there’s a separate $20,000 set aside to pay for potential ordinance and law improvements. Most insurance companies will offer different levels of coverage according to the age of your house. For instance, a customer with a home built in 1952 would probably need more coverage than someone who just built a house this year.
Why choose G2 Insurance for ordinance and law coverage?
At G2 Insurance Services, we want to keep you informed of the unique coverages and limitations different companies have included in their policies. While some of our companies provide the standard 10% coverage, many others will let us pick an amount, and some don’t limit it at all. The only way we will know what is best for our clients is to have a conversation about all of the features of the home and for us to do a full replacement cost calculation using your home’s information. That way you won’t be blindsided when the city forces you to upgrade something after a loss.
What circumstances could ordinance and law provide coverage for?
- Water damage
- Lighting strike
- Ice dams, etc.
How to find out if I’m covered
As mentioned earlier, Wisconsin is one of the states that actually mandates ordinance and law. However, even though it’s mandated, you could end up with a fraction of what you need from the coverage standpoint. So it is imperative that you are conscious of this type of coverage when shopping insurance companies. Give G2 Insurance Services a call to learn more about Ordinance and Law coverage or to discuss a homeowner’s or business policy today!