Does homeowners insurance cover bringing my home up to code?

A standard homeowners insurance policy typically won't pay to bring your home up to code. However, many insurance companies offer an optional building code insurance coverage that can help cover the cost of bringing your home up to code after it's damaged by a covered peril.

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What is building code upgrade coverage?

Building code upgrade coverage, also referred to as "Ordinance or Law Coverage," may pay for the additional costs you incur during the construction, demolition, or repair of a damaged covered structure due to changes in laws and regulations. A standard homeowners insurance policy may not offer this coverage with their base policy and may only pay to restore your home to its original state. If your city or other local government requires home repairs to align with modern building codes, you may want to consider purchasing this optional coverage if it's offered.

When do I need building code protection?

Building code insurance coverage may be valuable if you live in an older home that hasn't been updated to bring it up to the latest building codes. If you have a covered loss and the repairs require additional work to bring it up to code, you may be stuck paying out of pocket for the additional costs if you don't have this coverage.

How do I get building code coverage and how does it work?

Ask your homeowners insurance company if they offer building code coverage or shop around for an insurer who offers it. If your home is damaged by a covered peril and you're required to bring your home up to code as part of the repairs, then your building code coverage may apply. Note that building code coverage may include a limit that is tied to a certain percentage of your dwelling coverage (also known as Coverage A).

What are qualifying perils for building code coverage?

Similar to a homeowners insurance policy, building code coverage provides coverage when a peril insured against causes damage to a covered building or structure. Damages resulting from fire, water, falling objects, or storms that require your home to be brought back up to code may be covered.

Will building code coverage pay for renovations to my home?

Building code insurance coverage usually only applies if you're required to bring your home up to code as part of the repairs needed to fix damage from a covered peril. Costs associated with code upgrades due to renovations, remodels, or routine maintenance likely won't be covered.

Suppose you're replacing your roof and discover you need to make structural changes to bring it up to code. In this case, the cost of bringing the roof up to code will be your responsibility.

How can I tell if my home isn't up to code?

Consider contacting your local building inspection office or having your home inspected by a licensed professional to determine if your home meets the current codes in your area.

Are there coverage limits with building code coverage?

Building code coverage may be optional and there may be flexibility in the limits you choose. When purchasing coverage, you will be able to select from the options available with the insurer, typically around 10% to 25% of your dwelling coverage. Your insurance company or agent should be able to help you determine the amount of coverage that's right for you.

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