Costly Insurance Perceptions

A very common Costly Insurance Perception is that Ordinance or Law coverage is nothing more than an expensive extra coverage. WRONG!!
Much of the code enforcement in the state of New York's townships didn't begin until the late 1960's. As a result many homeowners could be caught with their pants down in the event of even a PARTIAL loss. Outer wall construction on most homes up to that point was two by four construction. Subsequent code changes now require two by SIX construction, if of course you would like to have a CO for your reconstructed home.
I have heard stories of folks who did not have this coverage and in a partial loss they came up $ 12,000 to $ 15,000 short during reconstruction. As well, most towns require complete & entire reconstruction for dwellings that have experienced a loss of 50% or greater...meaning you'll have to attempt to rebuild an entire home with maybe only half of your coverage due to the State regulations preventing the carrier from enriching the client. In a nutshell, if you have a 50% loss the carrier can only pay you based on that amount of loss. But the township may very well tell you that you MUST rebuild the entire dwelling. Ordinance or Law coverage is the only coverage that will save the client from these types of occurrences. As many clients will request cheap coverage I will explain to them that it is what it sounds like...CHEAP!! Meaning at claim time they could potentially suffer at bare minimum unexpected extra expense. Most folks aren’t even aware that this coverage exists. Not all companies offer this coverage and some only offer limited coverage. There is no merit in selling a homeowners policy without this coverage as it will only hurt the client in a claim.
This is another example why a qualified insurance agent should provide a client with their potential options.