Two Home Insurance Policies You Should Know About

Extended Dwelling Coverage
Extended dwelling coverage is an add-on to your standard home insurance policy that provides extra financial protection in case the cost of rebuilding your home exceeds your policy’s limits. While standard dwelling coverage is based on an estimate of your home’s rebuilding cost, fluctuations in material costs, labor, or unexpected building code updates can result in higher expenses than initially anticipated. With extended dwelling coverage, you’re typically covered for an additional percentage—often 10% to 50%—above your policy limit, ensuring you’re not left footing a hefty bill if rebuilding costs surpass expectations.

Why Should You Consider Extended Dwelling Coverage?

The value of extended dwelling coverage lies in its ability to safeguard homeowners against unpredictable market changes and unforeseen rebuilding costs. If your home is damaged by a fire, storm, or other covered peril, rebuilding costs may spike due to sudden increases in lumber or labor costs, especially in times of high demand following a natural disaster. Without extended dwelling coverage, you might have to pay out of pocket to cover these unexpected expenses. By adding this coverage, you gain peace of mind knowing that your home can be fully rebuilt to its original state, regardless of fluctuating costs. It’s a relatively affordable way to protect what is likely your most significant investment—your home.

Building Ordinance Coverage
Building ordinance coverage, also known as law coverage, is an optional add-on to your homeowners insurance policy that helps cover the costs of bringing your home up to current building codes during repairs or reconstruction. If your home is damaged by a covered peril, like a fire or storm, and local building codes have changed since your home was built, you may be required to make upgrades during the rebuilding process. These upgrades, such as installing energy-efficient windows, updating electrical wiring, or retrofitting for earthquake resistance, can be costly and are typically not covered by standard dwelling insurance. Building ordinance coverage ensures you won’t have to shoulder these additional expenses alone.

Why Should You Consider Building Ordinance Coverage?
Building codes are constantly evolving to improve safety, energy efficiency, and environmental sustainability. However, these updates can mean significant out-of-pocket costs if your home needs repairs or reconstruction that must comply with modern standards. Without building ordinance coverage, you might face financial strain covering the gap between what your standard policy pays for repairs and the extra costs of mandated upgrades. This coverage is especially valuable for older homes, as they are more likely to require substantial updates to meet current regulations. By adding building ordinance coverage, you protect yourself from unexpected expenses and ensure your home is rebuilt safely and up to code, giving you peace of mind in the event of a loss.