ADJUSTERSINTERNATIONAL.COM 5 Ordinance or law exclusions The introduction of modern building codes in the 19th century, and their application to damaged buildings, prompted insurers to exclude coverage for the cost of retrofitting existing structures to standards enacted after they were built (or ignored while being built). The logic of excluding coverage was that building code compliance was a cost of ownership outside the control of insurance underwriting. If additional costs for complying with codes were automatically included in building property coverage, insurers would be on the hook for increased losses resulting from factors that fall outside insurance underwriting. Building codes would, in essence, become a stealth peril to be triggered by a covered loss. Even today, almost every policy covering building property, including homeowners’ policies, includes some form of the following exclusion, developed by the Insurance Services Office (ISO)3:
RkJQdWJsaXNoZXIy NjIxNjMz