Law and Ordinance
In order to illustrate the potential gaps in coverage please join me in reviewing an entirely fictional claim. My fictional school is Beth’s Child Care Academy; Beth and Steven are the owners of this school.
It was a Sunday night at about 2am when the hot water heater burst into flames and my school began to burn. My school is 10 years old but I have a great alarm system installed. The fire department was on the scene within 10 minutes and after an hour of battling the fire, put it out.In the cold light of day, on Monday morning I was able to assess the damage and it appeared that about 70% of my school had been destroyed. I called my insurance agent and reported the claim. Once the claim adjuster met with me I was able to start interviewing contractors to get my school rebuilt.
During my meetings with prospective contractors I got some really bad news. My town: Anytown, Florida has a building code that requires me to tear downall of my building and start over if more than 55% of my building is destroyed. At first I thought this was bad news only because it would take me longerto rebuild. Then I found out it’s really bad news because insurance only pays for the damaged portion of the building.
And the bad news doesn’t stop there. I also have to pay to have that undamaged portion of my building torn down and the debris hauled away. The insurance will pay for the debris removal on the damaged part of the building but not the undamaged part.
You can avoid finding yourself in this situation by being sure you have Ordinance or Law coverage. This coverage provides three things:
2. The cost to rebuild the undamaged portion of your building if local ordinance requires it following a covered loss.
All the child care and school policies we sell provide varying amounts of built in ordinance or law coverage. These built in coverages may not be sufficient for your needs. We review all of our client's specific situations at renewal. If you would like to review yours sooner please call us.