Did Your Homeowners Insurance Claim Settlement Fall Short Because of New Building Code Requirements?

Loss Recovery and Building Code ChangesEndorsement with this policy.
After a natural catastrophe, you've likely sustainedHere are some areas where structural building code
large and severe property losses. What often comesupdates are often required:
as an "aftershock" to the catastrophe, are the higher
costs to rebuild according to the latest building1. Electrical Services and Wiring Updates: Electrical
codes...WHICH AREservice, junction boxes, wiring loads all may have
NOT COVERED UNLESS... you purchased andifferent requirements now than when your structure
Endorsement to your policy called either:was built.
- "Increased Cost of Construction" (with NFIP &2. Wiring Material and Wiring Protection. Types of
Flood policies) ORwire, wrapping, shielding and protection may be
- "Ordinance or Law" (possibly with your TWIAaffected by updated building codes.
policy, and definitely) with your Homeowner policy3. Framing Materials. Types of wood (2x4's, 2x6's,
Otherwise, your Insurance Company's agreementetc., found throughout the entire walls and roof
with you (found in your policy) is to "... pay the costareas, both in the Structure and the Garage-whether
to put you back the way you were". This would notattached or detached).
be to put you back as the Building Department4. HVAC Equipment. Efficiency, placement and
requires your building to be put back (reconstructed).weather requirements may have changed.
It will just be your "tough luck" if you don't have this5. Handicap Access
Endorsement. And, Heaven forbid that your Structure6. Ramps and Doorways. Codes for providing
is damaged (according to an estimate to be made byconvenient handicap access have probably been
your Building Department) more than 50% of itsupdated.
"assessed value". Then, you will need to bring the7. Kitchen and Bathroom. Fixtures allowing greater
entire Structure "up to current code"; and yourconveniences and assistance for handicap in these
Insurance Company will not pay you for requiredareas may have updates.
code change expenses...8. Water Systems and Plumbing Updates
UNLESS YOU BOUGHT one of those Endorsements,9. Plumbing and Sprinkler Systems. Metals, Shut off
which would cover this expense.... up to thevalves, pressure loads, and other components may
percentage of the Structure limit with thenow be vastly different than when your structure
Endorsement that you purchased.was built.
With NFIP and Flood policies, you are only able to10. Hurricane Preparedness Code Updates
purchase a maximum of $30,000.00, NO MATTER11. Exterior Doors and Windows. If wind or water can
WHAT YOUR Structure limit actually is. Thiseasily enter a house or commercial building, major
Endorsement (with other than NFIP and Flooddamage to the structure can result. Ordinances and
policies) is available in amounts that are Acode requirements for the bracing and strengthening
PERCENTAGE of your Structure limit. You usually areof windows, doors and garage doors are often
able to purchase this Endorsement in the followingnecessary.
percentages: 10%, 25%, 50%, and 100%.12. The Roof. Wind resistance standards have often
If this endorsement came with your policy (or comesbeen updated. Also, types of roof structures and
with some future purchased policy), it will most likelyshapes have often been updated. Gable roofs have a
be only 10% of your Structure's limit. And this kind oflarge "A" shape which can absorb a lot of storm
expense can, and very often is, very expensive forenergy, and may now have restrictions or specific
you... especially when it is "out of pocket".strengthening requirements when being rebuilt.
A very good rule of thumb to determine theConforming to the latest building codes present a
percentage of this Endorsement to purchase, is tovery challenging insurance recovery dilemma.
use the number found in the percentages availableTips for getting the most from your claims recovery
(10%, 25%, 50%, and 100%) as the probableprocess:
MAXIMUM NUMBER OF YEARS for which this- You need to document everything, people you talk
percentage will be sufficient, or very close toto, dates, phone calls, etc.
sufficient. In other words, if your home is 10 years- Get to know and use your Local and State
old (from the date of original construction), then 10%Insurance Department and Consumer Affairs Divisions
will probably be sufficient, or very close to sufficient.as a resource for any information concerning how to
Should your home be between 10 and 25 years old,get the most for your insurance claim.
then 25% should do.- If a contractor or Insurer, Agent, or Adjuster, is
If your home is between 25 and 50 years old, thendoing anything that you deem unfair, you need to
50% should cover almost all of this uncovered costask the Insurance Department to investigate them
to you.for a violation of the Unfair Claims Settlement
But if your home is older than 50 years of age, thenPractices Act.
you should purchase 100% Endorsement coverage.- Get to know any special commissions or
And since my home was originally built in 1958, I haveemergency task force units and how they might help.
100% "Ordinance or Law" Endorsement with my- Remember that a letter, formally written and
policy. And this costs me about $125.00 to $150.00expressed, can sometimes give you more power
additional each year, with my Homeowner policy; andthan you thought.
about $50.00 (more or less) with my NFIP policy.- Get several quotes from licensed contractors.
Wind coverage is included in my home State with ourUnderstand how you need those quotes broken
Homeowner policy; so I don't need to buy thatdown.