8 ADJUSTINGTODAY.COM coverage already anticipates the likelihood that a partial loss will result in a total loss, so extending the coverage to structural components may not, on its own, expand the scope of the loss. For additional premium, Coverage A is established simply by checking a box on the endorsement schedule, while Coverages B and C are established by indicating per-location or blanket limits on the schedule. Limitations and expansions CP 04 05 was introduced with some important provisions affecting application of the coverage provided; some of those provisions have been modified over time, others have not. Pollution and mold Since 1988, ISO ordinance or law coverage endorsements have excluded coverage for any requirement to test for, remove, contain, etc., any type of “pollutant.” In 2002, that exclusion was expanded to exclude coverage for any requirement to test for, remove, contain, etc., any type of “fungus, wet or dry rot, or bacteria.” Applicable laws and ordinances The 1988 version included a provision (still the default position) that coverage applies only to enforcement of ordinances and laws that were in effect at time of an insured loss. In 1995, a clarification was added stating that the endorsement would not pay for any loss due to failure to comply with a previous ordinance or law requirement. Insurers would not pick up the cost of someone ignoring a building ordinance or law when they had a chance to comply. Comparing coverage: CP 00 10 and CP 04 05 Property covered Costs of demolition and debris removal Coverage for increased cost of reconstruction Limit Applies only to property damaged by a covered cause of loss. All costs covered under the policy’s separate additional coverage for debris removal. Pays for increased costs to comply with minimum standards of an applicable ordinance or law. Built in at the lesser of $10,000 or 5% of the limit for the covered building. Applies to damaged property and to undamaged property that must be demolished due to enforcement of a building ordinance or law. Costs to demolish undamaged property and remove debris covered under Coverage B. Covered for increased costs of reconstructing both damaged and undamaged property up to minimum requirements of an applicable ordinance or law. Loss to undamaged portion of a covered structure falls within the limit for that building. Limits for demolition/debris removal and increased cost of reconstructing to code indicated on endorsement schedule. CP 00 10—Increased Cost of Coverage (built-in additional coverage) CP 04 05—Ordinance or Law Coverage (optional endorsement)
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