A client had a house fire and due to the fire, smoke and water it damaged either the floors, walls or ceilings in 10 of the 12 rooms in the home. The Home policy included 10% of Coverage A and an additional endorsement in the policy increased it to 20% of Coverage A or $164,000 x 20% = $32,800.
Policy wording: You may use up to 20% of the limit of liability that applies to Coverage A for the increased costs you incur due to the enforcement of any ordinance or law which requires or regulates.
The Ins. Co. is refusing to pay for upgrades to the affected areas because the insured lives in a rural area in Missouri and the town/county does not have a paid inspector that sits in an office that will go out and enforce codes.
The Insured's contractor, electrician & plumber refuse to perform any work unless it is by the Uniforn Standard Codes such as NEC National Electrical Code, Standard Building Code or Plumbing Codes. They are unwilling to jeopordize their license and/or insurance, not to mention being liable or held responsible if something happens due to failure to perform work to meet Uniform Standard Codes.
The Ins Company states they are not required to pay because no official enforces the code in that area.
In my opinion, if no reputable or licensed or insured contractor, electrician or plumber will perform work unless it is by Uniform Standard Codes, that should be enforcement enough.
I thought the Federal Government developed codes for safety and well being of the public such as (NEC) National Electrical Code, (UBC) Uniform Building Codes, (IBC) International Fire Code, (IRC) International Residential Code, (IPC) International Plumbing Code, (IMC) International Mechanics Code, etc.
If there is no way to collect on the coverage in a rural Missouri area because there is no paid official in an office there to enforce them, then the insurance company should not offer or sell policies that include the ordinance or law coverage or allow the coverage in a standard home policy to be increased from 10% to 20%. They should not be able to offer a coverage they refuse to pay out on or in the very least they should be required to state the definition of the coverage in the policy. Nowhere in the policy does it provide a definition of their interpretation of coverage for the word incur, enforcement, ordinance, law, requires or regulates. The wording is ambiguous and misleading and a person would have no way of knowing or understanding the specific interpretation of the coverage unless they were forced to go through it in their time of tragedy, only to find out that the coverage is not available.
I believe insurance companies should be required to provide a better description of the coverage in the policy or at the very least include their definition of the word enforcement and law.
Any thoughts, suggestions or opinions on how to get the insurance company to pay for the upgrade due to damage from the fire or how to force insurance companies to change the wording in their policies.