Law and Ordinance Coverage: What Homeowners Need to Know (And It’s Not About Artillery)
When a Simple Insurance Claim Gets Complicated
You live in a really nice—though not brand-new—home. One day, your dishwasher breaks and floods your kitchen. You call your insurer and say, "Hello, can you help?" Maybe you even feel a little sheepish.
Don’t. You paid your premiums, and this is exactly what insurance is for. Trust us—the insurers are doing just fine.
While waiting for your insurance check, you likely call a contractor. They come over, look around, and estimate that repairs will cost about $19,472. You sign the contract, move your food next door, and take a deep breath.
The Lowball Check: Code Upgrades and Insurance Exclusions
A few days later, you receive a check from your insurer—for $1,274.
First comes the nausea. Then you call your insurer, who cheerfully explains that everything beyond $1,274 is for “code upgrades.”
Here’s the translation:
In order to legally repair your kitchen, your contractor must not only fix the water damage but also update plumbing and electrical systems to meet current building codes.
Your insurance company points to a provision in your policy excluding “increased costs relating to the enforcement of building codes.”
In short: they claim they don’t have to pay for repairs that involve upgrading your home to current code requirements.
Good News and Bad News for California Homeowners
Bad News:
Every insurer in California uses this exclusion to save on claims costs. Since many California homes are older, upgrades to meet building codes can swallow most of your claim payout.
Good News:
California law is on your side.
Under California law, insurers are supposed to pay you to fix your house without excluding normal upgrades required by code enforcement. Your repair payout should not be reduced because of necessary, typical updates.
We are fighting this fight across the state—and we are winning.
It may take some time, but we hope that a few years from now, you’ll get that check for the full repair costs you’re owed.
In the meantime—stay dry!