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Tom- with all due respect I disagree with your line of reasoning. If a structure is built with no permits and with numerous code violations, the carrier must still indemnify the insured for the value of that structure. What policy has an exclusion that says "we will not pay if the structure was built in violation of building codes"? Of course the carrier might decide that a) they're not paying for permits on a building that was built without permits, b) higher depreciation applies due to the short expected life of the poorly built structure c) no overhead or profit will be allowed because the structure wasn't built by a contractor.

I'm not saying these "defenses" would be correct but they could be reasonable. But I wouldn't want to tell an insured flat out that a building wasn't covered simply because it was bootleg construction.

Also, the mountain area where this was built might not have had any codes when it was built. I think code compliance is almost irellevant for determining loss, unless your talking about code upgrade coverage.

Let's say some guy owns a garage door replacement company. Many of the old wood doors here in southern california end up in Mexico a building materials. I have been in homes made from used garage doors. Let's say our garage door guy builds a storage building here in the US with these used garage doors. The city gives him a notice to tear it down right before it blows down in a wind.

As an adjuster, assuming there is coverage at all, you would need to calculate the loss based on material cost (used doors plus strapping etc) and labor. I wouldn't deny coverage per se just because it wasn't code.

I would agree with you on the tree house- $500 max for the tree. Even though it supports the tree house it is still a tree and therefore expressly excluded for loss over $500.

On the stump that is used for foundation I would not limit that to $500 if a reasonable replacement cost more.

1) It is reasonable to characterize a stump used to support the structure as no longer being a "tree", especially an "outdoor tree" as the policy states.
2) The issue of it not being code compliant is irrelevant.

Anyway you are the senior old man on this site so I owe you a beer next time we meet.

Things must be really slow for catadjusters based on the amount of discussion about this tree house.

I am going to start another thread that will get everybody excited.