The Connecticut Association of Public Insurance Adjusters, together with a number of legislators and particularly with the assistance of the CAPIA Board and the lobbyists it retained, an “Act Concerning Law or Ordinance Coverage,” otherwise known as Public Act 18-105, was passed and will become effective on July 1, 2019.

Public Act 18-105 provides that insurance policies insuring for fire (other than commercial insurance policies) must provide coverage for the “increased cost of repair or reconstruction by reason of ordinances or laws regulating such repair or reconstruction.” Prior to the enactment of this Act, certain insurance companies doing business within the State of Connecticut did not provide any Law or Ordinance Coverage.

What is the significance of Law or Ordinance Coverage? If your home suffers damage by fire or some other covered loss, Local or State Building Officials will require you to comply with building codes when repairing or reconstructing your damaged property. Examples include changes made to electrical, plumbing and insulation requirements that may have been made after the construction of your home. Sometimes, bringing your home “up to code” can be very expensive, and many insurance companies only provide 10% of Coverage A (Coverage A is the amount of your building damage coverage) toward such expenses. Prior to the enactment of PA 18-105, many companies did not provide any such coverage at all, and several Connecticut insureds suffered severe financial hardship when the Local or State Building Officials required them to update their homes to comply with code regulations.

Damage by Fire or Other Cause

PA 18-105 does not mandate a specific amount of coverage the insurance companies must provide to Connecticut insureds, but it does mandate that such coverage be provided. Insureds should always check with their insurance agents or companies to determine their options with respect to their coverages, including law or ordinance coverage.

In the opinion of Biller, Sachs, Zito & LeMoult, 10% of Coverage A is inadequate Law or Ordinance Coverage. Perhaps your agent or company can offer you additional coverage. You should always compare premiums and coverages of different companies to be sure you are adequately protected. If you are unsure as to any part of your insurance policy, the languages, coverages or amounts of coverage, please feel free to contact our offices.

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