By Christian Bevington, Farmers Insurance

Laws and regulations with city, county and state levels are a daily fact of life to apartment building owners in California. Remaining in compliance can seem like a full time job. If your property experiences a major loss, don’t expect a regulation break from City Hall. In fact, you might now face the most costly compliance issue you will ever experience as a property owner.

Building Ordinance or Law Coverage is an optional coverage designed to protect the property owner from the cost of complying with building code laws that were passed after their property was built.

Say for example, three units are destroyed due to a major fire at your property. During the planning of the reconstruction, you may learn that your municipality requires upgraded standards for your buildings electrical, plumbing, and HVAC systems. This could easily add substantial costs to your already absorbent expenses for this project. Other items may include a sprinkler system and handicap access. This may be additional items added in order to keep your property in compliance with new building codes.

Let’s take this a step further, say your property building has endured over 50% of structure damage. Depending on where your property is located, the local codes may require the remaining structure be demolished completely and reconstructed to rebuild a new structure in order for it to be in compliance with current building codes. A standard building policy may have an ordinance or law exclusion. This could mean that the demo and reconstruction costs on the half of the building that was not damaged are not covered. We recommend you carefully read your policy to see if you are exposed.

Building Ordinance Coverage can be added to your building policy by endorsement. This   endorsement is designed to provide funds to cover the additional reconstruction costs associated with compliance of current building codes. Building Ordinance Coverage can mean the difference between being able to completely rebuild your property into an income generating asset or having to walk away from the shell of a structure because you simply cannot afford to rebuild to codes now on the books.

When shopping for a new building policy, look for an insurance company that offers endorsements on Building Ordinance Coverage. The level of coverage your property needs will depend on your local building codes. Farmers Insurance provides endorsements to cover building ordinance compliance that can be tailored to fit the size and geographic location of your property.

Bevington is an Agent with Farmers Insurance. He offers business insurance to property owners and renters insurance to your tenants. He is a member of AAGLA and a property manager since 2005. You can reach him at 310-418-1500 cell or at cbevington@farmersagent.com.