San Leandro, CA Oakland, CA Ordinance Coverage on your Homeowner’s Policy

If your home was built more than just a few years ago, it’s likely that rebuilding or replacing your home will require upgrades based on building code changes. In fact, there were many changes to California building codes in 2019, so reviewing Ordinance coverage on your homeowners or dwelling fire policy is more relevant than ever!

What is Ordinance Coverage?  Your traditional homeowners policy will repair or replace your structure with like kind and quality. This means that any cost increases to repair or replace your home that are due to code changes would not be covered if you don’t have Ordinance Coverage in your policy.  More commonly, the Homeowners policy will have a percentage limit built into the policy, so there may be a cap of 10% or something like that.  An example of code upgrade is fire sprinklers.  Let’s say your home does not have fire sprinklers like most homes in California!  You have a kitchen fire and part of your home burns down and repairs are needed.  Well, the “code” may require you to install fire sprinklers and in some cases, the code may require you to install them throughout the home!  This will be costly and may exceed the built in limit on your policy.  

Most code changes are related to the materials but in some cases, they could be accessible issues as well.  These “upgrades” are generally not part of the replacement cost provisions of your policy, so it makes sense to talk to us about increasing the coverage.  Often, the costs are not prohibitive i.e. they can be about 5-7 percent of the premium to increase your code upgrade coverage from 10% to 50%.  If you have an older home, it’s really a no-brainer!

Next time you review your insurance, please give us a call and ask about Ordinance Coverage!