How does building code coverage work?

It covers additional costs to repair/rebuild according to current building codes when making covered repairs.

Building code coverage is an aspect of your insurance policy that helps cover the extra costs involved in repairing or rebuilding your condo or townhome to meet current building codes. When homes or buildings are constructed, they adhere to the building codes in place at that time. Over the years, these codes can change, often becoming more stringent to improve safety and energy efficiency. If your home suffers damage, you'll need to repair or rebuild it not just to its former condition, but to meet current codes. This can mean additional costs, such as using more expensive materials or adding features like energy-efficient windows. Building code coverage is designed to help you manage these additional expenses that aren't part of the standard replacement cost coverage.

Imagine you own a condo built in 2000. Recently, a significant storm damaged your roof, and it needs replacement. However, local building codes now require that all new roofs include certain fire-resistant materials that weren't required when your condo was built. The cost for these materials is higher than what a simple replacement for your existing roof would be. Building code coverage in your insurance policy would cover this added cost, ensuring you don't have to pay out-of-pocket for upgrades that bring your property in line with current regulations.

When reviewing or purchasing homeowners insurance, make sure to discuss building code coverage with your insurance agent. Check if your current policy includes this coverage, and consider its limits. It's a good idea to update your policy to ensure it adequately covers potential code-related expenses, especially if your home is older and more likely to need upgrades during repairs. Understanding how this coverage works can save you from unpleasant surprises and out-of-pocket expenses when you need to make a claim.