What it does
BP 04 46 provides ordinance or law coverage for buildings shown in its Schedule. Each coverage applies only if selected:
- Coverage 1 – loss in value of the undamaged portion of a building that must be demolished.
- Coverage 2 – cost to demolish and clear the undamaged portion.
- Coverage 3 – increased cost of construction to repair or rebuild to code.
- A Business Income and Extra Expense Optional Coverage can be selected in the Schedule, with its own entry for the waiting period applicable to the period of restoration.
Key provisions
- The ordinance must regulate demolition, construction or repair (or zoning/land use) and be in force at the time of loss; only minimum requirements are covered.
- When covered and uncovered damage together trigger enforcement, payment is proportional to the covered share of the damage.
- ISO also describes post-loss ordinance or law options for ordinances revised after the loss but before repair begins.
- Limits for Coverages 2 and 3 can be separate or combined.
Who needs it
Owners of older buildings, buildings in flood or wind zones with elevation or construction requirements, and lenders who require it. BP 00 03 alone carries only a small Increased Cost of Construction additional coverage, so most building owners need this endorsement.
Quoting and selling notes
- Ask about building age, renovations, sprinkler retrofit requirements and local substantial-damage rules; size Coverage 3 to the likely code upgrade cost.
- Several states use their own versions (for example California, New York, Virginia, Alaska).
Related forms
BP 00 03; BP 04 84 Functional Building Valuation.
