Rebuilding after major damage may require meeting building codes and ordinances that weren’t in effect when the home was originally built. Those added costs aren’t necessarily covered in full by a standard homeowners policy.
What Law and Ordinance Coverage Pays For
Florida law requires insurers to offer homeowners replacement-cost coverage that includes certain costs of complying with applicable building laws and ordinances — the added expense of meeting a current code requirement that goes beyond simply restoring what was there before.
Florida’s Required Coverage Options
Law and Ordinance Coverage Requirements
- The added coverage may be limited to 25% or 50% of the dwelling limit, as selected by the policyholder.
- If a policy is issued or renewed with the 25% option, the insurer must also offer the 50% option.
- Unless the insurer obtains a written refusal on an Office-approved form, the policy is deemed to include the coverage at 25% of the dwelling limit.
- The insurer must give notice that the coverage is available at least once every three years.
Fla. Stat. § 627.7011(1)–(2).
The coverage generally applies to repairs of the damaged portion of the structure, not the building as a whole — unless total damage exceeds 50% of the structure’s replacement cost, in which case that limitation drops away. These requirements apply to homeowners policies as that term is commonly understood; they don’t extend to mobile-home policies or other policies that aren’t homeowners policies.
What This Coverage Doesn’t Do
Law-and-ordinance coverage pays qualifying added costs when a covered loss requires compliance with a current building code — it isn’t flood insurance, and it isn’t a guarantee that every modernization cost gets paid. Wiring upgrades or structural elevation, for example, are only covered when a covered loss is what triggers the code requirement in the first place.
If you’re facing code-driven repair costs after a loss, start by checking your declarations page and endorsements for your law-and-ordinance limit and any language about work to undamaged portions of the structure. This issue comes up often in our Hurricane & Storm Damage Claims and Roof & Hail Damage Claims work, and we can help you work out what your policy actually owes.
This article describes statewide statutory requirements. A particular claim still depends on your policy language, the cause and extent of damage, and the facts of your situation.