How would you handle this Ordinance or Law claim? The following information does not suggest a specific claim but is used as an example.
The endorsement reads as follows:
Ordinance Or Law
a. You may use up to 10% of the limit of liability that applies to Coverage A for the increased cost you incur due to the enforcement of any ordinance or law which requires or regulates:
(1) The construction, demolition, remodeling, renovation or repair of that part of a covered building or other structure damaged by a Peril Insured.
(2) The demolition and reconstruction of the undamaged part of a covered building or other structure , when that building or other structure must be totally demolished because of damaged by a Peril Insured Against to another part of that covered building or other structure, or
(3) The remodeling. removal or replacement of the or portion of the undamaged part of a covered building other structure necessary to complete the remodeling, repair, or replacement of that part of the covered building or other structure damaged by a peril insured Against.
The insured was paid Coverage A policy limits - $100,000.00
Yes it was under insured.
The insured got a hungry contractor to do most the repairs for $95,000.00 About $10,000.0 in damages not included in contractors estimate are left to be repaired by the insured. All other contractors estimates to repair damages included in adjusters original estimate were for $135,000.00 and up.
House was repaired and he was given a CO. No electrical was ever addressed in original estimate which totaled RCV $110,000.00 . Because the adjuster had done so many of the homes of this size he knew policy limits would be reached without including some damaged electrical fixtures and the damaged breaker box. Anyway the carrier was limiting the service bill portion for Coverage A to the policy limit and he did not want to do any unnecessary estimating. No pictures were ever taken of any electrical items.
Insured presents bill for $3,500.00 to totally rewire house, all fixtures, and put in a new breaker box. Originally the house had 16 plugs, ( no GFIS) and a 150 AMP box. I will not consider any additional electrical as ordinance and law issues for this example other than what follows. Leave the additional wiring alone in this consideration. Floor plan was not changed. Code requires insured to have a total of 24 regular plugs, 3 GFIS in place of the 3 original plugs ,and a 200 AMP box.
Electrician’s Invoice included some the charges below.
Cost for regular plugs $25.00
Cost for GFIS $50.00
150 APM box $750.00 ( informational only)
200 AMP box $1000.00
Fixtures $1000.00
Rewire house with all new fixtures $1,150.00
For your consideration: What would you do?
1. Pay the full $3,500.00 owed because it was never addressed in original estimate.
2. Include one 200 amp box, 3 GFIS, and 8 plugs and pay- $1,350.00
3. Difference in cost between 150 and 200 AMP box, difference in cost between GFIS and regular plugs, 8 additional plugs ( remember is was never damaged according to original estimate) and pay $525.00
4. Pay $0 because policy limits were paid and if the agent had done his job the house should have been insured for $125,000.00. Recommend to the insured they go after the agent under his EO insurance.
5. Pay $0 because they already had enough money to do the repairs and did not incur any additional cost. (see language above “ increased cost you incur” )
6. Pay $525.00 only if he spends an additional $5,525.00
6. Include one 200 amp box, 3 GFIS, and 11 plugs and pay $1,425.00
7. None of the above