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What is ordinance or law coverage in an insurance policy?

On Behalf of | Jan 6, 2023 | Insurance Disputes

Californians will undoubtedly rest easy knowing they have sufficient insurance coverage to account for every eventuality. Whether it is a fire, a storm, an earthquake or an accident, insurance is crucial to be fully protected. However, people often enter into disputes with their insurance companies as to what will and will not be paid for.

There may be certain areas of insurance coverage that people are unfamiliar with. Or they might think they had this coverage and the insurance company is trying to limit what they will pay or is claiming the policyholder did not have enough coverage to pay for all the damage.

One part of an insurance policy that people should know about is ordinance or law coverage. Getting the necessary coverage beforehand is preferable, but after an incident, it is vital to know what certain types of additions to a policy do and to make sure the company lives up to its end of the bargain.

Understanding ordinance or law coverage and what it does

Ordinance or law coverage serves an important function as part of a homeowners or commercial insurance policy. This provides protection if the property needs to be updated based on changed laws and ordinances.

For example, if a person owns a building that was destroyed in a wildfire, the insurance policy would pay for repairs up to a point. However, if the state building codes have changed since it was constructed or updated, certain improvements would need to be made to meet those codes. Examples are the plumbing or the electricity. The basic policy does not cover that. This could leave the owner responsible for the costs to upgrade.

The added protection of ordinance or law coverage would allow for the repairs to be made as well as the improvements to update the property. The coverage will pay for the loss of value on the property if the entire structure needs to be destroyed due to a certain percentage of damage.

It will shield the owner from the rising costs of construction from extra work. This is especially timely with the economy in its current state and contractors needing to pay more for materials and passing those costs on to the consumer. It also covers the cost of demolition.

Legal guidance can help with insurance issues

Given the number of unforeseen challenges that have come up in recent years, people have frequently found themselves engaged in a dispute with their insurance provider as to what should be covered. This is true for Californians who have suffered loss because of wildfires, earthquakes, damaging weather and other problems.

Many residential and commercial property owners as well as business owners are confronted with the obstacle of getting repairs paid for based on their policy. A common mistake is failing to contact legal professionals who are immersed in the insurance industry and have the experience and depth of knowledge to adequately cover all the bases and receive the payments to repair and rebuild.

As soon as the damage has occurred, it is imperative to assess the coverage and know what the insurance company is obligated to do. Holding the insurer accountable for what they are supposed to be paying may require professional advice. This is especially true if they are refusing to pay for certain repairs or there are disagreements to the limits of the coverage. This can save time and money and ensure the policyholder is treated fairly.

It is wise to have advice regardless of whether there is an ongoing dispute or not. When seeking the right type of insurance coverage, it is imperative to have assistance when purchasing the policy just as it is when trying to collect on the insurance. Calling for representation is a key step and should be a fundamental part of being fully prepared.