Insurance Commissioner Encourages Expediting Process in Ordinance Coverage Situations

Homeowner examining a ceiling in need of repair

Ordinance or law coverage is a common supplemental coverage offered under homeowner and commercial property policies.

It’s also known as code upgrade coverage or building ordinance coverage. This additional coverage applies when an insured has damaged property and the cost for repairs includes upgrades so the property meets the most up-to-date building codes.

Some insurance companies are requiring local building officials send them a correspondence confirming the building code will be enforced by the local authority. This step, however, is unnecessary and can delay important insurance payments from reaching the insured in a timely manner.

The Washington Association of Building Officials (WABO) reiterated to Commissioner Mike Kreidler their opposition to this extra step, explaining in a letter that “building officials follow current law in effect as of the date a completed building permit application is accepted by the local authority having jurisdiction.”

Furthermore, the Building Industry Association of Washington (BIAW) noted that “contractors are bound to all current codes, rules and laws when updating or renovating structures to bring them up to code.”

“Any delay with insureds’ receiving insurance repair funds that focus on upgrading the structure to proper building codes is a public safety issue as much as an insurance issue,” said Commissioner Kreidler. “I encourage all property insurance companies to recognize that if a building code, ordinance, or law is on the books, it is enforceable. You do not need a local building official to verify it. If an insured has ordinance or law coverage and incurs the need to bring the structure up to code, the appropriate insurance payment should be timely provided to them.”

Visit the OIC website to learn more about homeowner insurance.

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WA State Office of the Insurance Commissioner

Washington state Insurance Commissioner Mike Kreidler regulates the insurance industry and protects insurance consumers.