Why you should keep ordinance and law coverage on your home

Getting homeowners insurance can be a daunting task. There are so many choices and options it's hard to know which coverages you actually need and which ones you can opt-out of to keep your premiums down. As a public insurance adjuster, we're hired to handle the insurance claim process for homeowners which involves reviewing policies and determining if your property damage is covered by insurance. One coverage we tend to see people eliminate is law and ordinance (O&L) coverage. O&L is mandatorily offered by statute but for lower premiums, you can reject it by signing a waiver or written refusal.

What is O&L coverage?

O&L coverage pays for the increased cost required to repair or replace your home due to a local ordinance, building code, or law requirements. This endorsement is offered at either 25 percent or 50 percent of the main dwelling limit (Coverage A).

How does having O&L coverage affect your claim?

The Florida Building Code is updated every three years and any changes that were made, may affect the way your home would have to rebuilt if damaged. If your house was built in 2001 and a tree falls into your house or your home gets flooded by a leaky pipe, depending on your policy, your insurance company would only be responsible to pay to put your home back together as it was in 2001. You, as the homeowner, would be responsible to pay for any additional repairs that are required by the ordinances or laws currently in place. This could be an unexpected, substantial amount of money depending on how much damage your home has sustained. This is especially important for those living in coastal areas below the 100-year flood elevation. In those areas, if the repair costs exceed 50 percent of the market value of the structure, the entire structure must be brought up to the current floodplain management standards, in accordance with FEMA. This would mean your existing home would have to comply with the same requirements as a new construction home.

With the ever-changing building requirements, even homeowners with relatively new homes could be on the hook to pay more out-of-pocket than their deductible if they decline O&L coverage. Check your policy today to make sure you're covered if the unexpected happens.