Frank: I want to talk about a couple of coverages that are sort of particular to Florida and that you really need to address, especially with the hurricanes. Kevin's going to start us with law and ordinance.
Kevin: There's a coverage under your homeowners policy that's called law and ordinance or ordinance and law coverage, and what it that does is provides additional funds under your policy to cover the increased cost of construction to your home because of an ordinance or a law, not because of any direct damage. And what I mean by that is, for example, if you live in Brevard County, if you suffer damage to the framing of your window after a hurricane as is very common, as is very common that happens. The current building code says that when you rebuild that property, those windows have to be built to a certain strength, and there also have to be shutters involved.
Frank: Either impact glass or shutters.
Kevin: And when you think about Hurricane Andrew when it happened in the early '90s down in the Homestead area, because of the catastrophic damage like nothing anybody had ever seen before from a hurricane -- catastrophic damage -- you've got local authorities coming out playing damage control trying to convince people, hey, we are not going to let this happen again. Something this terrible will never happen again. The way they so that is they start to enforce new building codes. For example, improvements to the roof-to-wall connections, changes in the elevation requirements for a home that is too close to the water, changes in the elevation. Items such as that are going to cost more money when you have your house repaired or have your house rebuilt. And because those costs had nothing to do with the way your house was before the loss, your homeowner's policy doesn't owe you anything for that unless you have enough insurance under the ordinance and law part of the policy. That's why it is important to talk to the agent to know exactly what the codes are in your area and how they could impact the rebuilding of your house after it's damaged.
Frank: Even now, last October, they passed a law that if you put a new roof on, you have to have a secondary water-resistant barrier. So, if those shingles blow off, there's another layer to protect you before the house leaks, and typically, that's like a peal-and-stick foam rubber that they lay down that covers all the cracks, and a lot of times, they do the whole roof. So, if your shingles blow off, your roof won't leak. That's the biggest problem. You're going to get water damage. So, those codes change. Take your roof. I think it's about $2,000 more per year to do that. So, the insurance company that you have, if your roof blow off, call the insurance company and say, hey, listen, the roof was $8,000 to replace it, well, now I need this barrier. Well, hey, without this law and ordinance coverage, they wouldn't pay the $2,000. Law and ordinance insures that you get that $2,000. So, you do want to make sure you have that. Keep in mind that it comes in different levels. Some policies give you 10% of the value of the house. Again, if you have a $100,000 house, 10% is $10,000. You could by 25%, which would be -- on a $100,000 house -- it would be $25,000. Again, you could go to 50%, which would be $50,000 on a $100,000 house. What you want to do, though, is at least make sure you know where you stand. Don't just ignore it, put your head in the sand and say, ahh, this will never happen to me. This is Florida. We have fires, we have hurricanes. So, these things do happen, so you want to pay attention to it.
Kevin: There's a coverage under your homeowners policy that's called law and ordinance or ordinance and law coverage, and what it that does is provides additional funds under your policy to cover the increased cost of construction to your home because of an ordinance or a law, not because of any direct damage. And what I mean by that is, for example, if you live in Brevard County, if you suffer damage to the framing of your window after a hurricane as is very common, as is very common that happens. The current building code says that when you rebuild that property, those windows have to be built to a certain strength, and there also have to be shutters involved.
Frank: Either impact glass or shutters.
Kevin: And when you think about Hurricane Andrew when it happened in the early '90s down in the Homestead area, because of the catastrophic damage like nothing anybody had ever seen before from a hurricane -- catastrophic damage -- you've got local authorities coming out playing damage control trying to convince people, hey, we are not going to let this happen again. Something this terrible will never happen again. The way they so that is they start to enforce new building codes. For example, improvements to the roof-to-wall connections, changes in the elevation requirements for a home that is too close to the water, changes in the elevation. Items such as that are going to cost more money when you have your house repaired or have your house rebuilt. And because those costs had nothing to do with the way your house was before the loss, your homeowner's policy doesn't owe you anything for that unless you have enough insurance under the ordinance and law part of the policy. That's why it is important to talk to the agent to know exactly what the codes are in your area and how they could impact the rebuilding of your house after it's damaged.
Frank: Even now, last October, they passed a law that if you put a new roof on, you have to have a secondary water-resistant barrier. So, if those shingles blow off, there's another layer to protect you before the house leaks, and typically, that's like a peal-and-stick foam rubber that they lay down that covers all the cracks, and a lot of times, they do the whole roof. So, if your shingles blow off, your roof won't leak. That's the biggest problem. You're going to get water damage. So, those codes change. Take your roof. I think it's about $2,000 more per year to do that. So, the insurance company that you have, if your roof blow off, call the insurance company and say, hey, listen, the roof was $8,000 to replace it, well, now I need this barrier. Well, hey, without this law and ordinance coverage, they wouldn't pay the $2,000. Law and ordinance insures that you get that $2,000. So, you do want to make sure you have that. Keep in mind that it comes in different levels. Some policies give you 10% of the value of the house. Again, if you have a $100,000 house, 10% is $10,000. You could by 25%, which would be -- on a $100,000 house -- it would be $25,000. Again, you could go to 50%, which would be $50,000 on a $100,000 house. What you want to do, though, is at least make sure you know where you stand. Don't just ignore it, put your head in the sand and say, ahh, this will never happen to me. This is Florida. We have fires, we have hurricanes. So, these things do happen, so you want to pay attention to it.
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