Definition
When codes change (electrical upgrades, new safety requirements), this coverage pays the difference between rebuilding to old standards versus current code.
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Building ordinance coverage pays the difference between pre-loss value and higher costs to rebuild to current codes. As codes become more stringent, replacement costs exceed original values. Coverage typically provides 10-25% of dwelling coverage. Especially valuable for older homes.
Pro Tip
Building ordinance coverage is valuable for older homes. Code upgrades can exceed original replacement costs.
Example
Building ordinance coverage pays $40,000 to upgrade electrical system to current code during post-damage reconstruction.