The insured was making fried green tomatoes when they had to help a neighbor with an emergency. The tomatoes caught fire, and damaged the kitchen. The city building inspector came to sign off on the kitchen repairs, and noticed the rear deck was improperly constructed.
Notable Timestamps
[ 00:27 ] - The policyholder is asking her insurance company to include fixing the deck as part of her fire claim. Since the deck wasn't touched by the fire, the adjuster denied it. Now the public adjuster is coming back seeking coverage for the deck under the Ordinance or Law Additional Coverage.
[ 01:47 ] - Tim talks traditional Tennessee recipes.
[ 03:07 ] - The fire is likely covered, even if the homeowner left the skillet unattended.
[ 03:50 ] - To paraphrase, Ordinance or Law Additional Coverage covers increased costs due to enforcement of ordinance or law for the portion of "the undamaged part" of a covered building "necessary to complete" the repair of the damaged part.
[ 06:00 ] - If the inspector had insisted on fire alarms, the argument that the "necessary" language applies would be stronger.
[ 06:30 ] - In Chattanooga Bank Associates v. Fidelity & Deposit Co. of Maryland, 2004 WL 187409 (E.D. Tenn. 2004) [reviewed at PLRB, Prop. Ins. L. Rev. 6657 (2004)], Ordinance or Law coverage did not extend to code violations discovered in areas that were not affected by fire damage.
[ 07:10 ] - It seems city inspectors do sometimes withhold permits for seemingly unrelated code violations.
[ 08:10 ] - An inspector's order is likely considered an "ordinance or law" though it is not, strictly speaking, either one. Compare to the demand of a private HOA, which would not be an ordinance or law.
[ 09:11 ] - If something is built prior to a code change, it typically only needs to be updated when it is remodeled. The correct term for this is "Legacy Code Exceptions."
[ 10:30 ] - Commercial "ordinance or law" Additional Coverage forms specifically do not include violations that existed prior to the loss, but personal forms are often silent on that point.
[ 11:30 ] - The contractor who built the deck could be considered negligent, but the policy's faulty work exclusion may or may operate to override Ordinance or Law coverage.
[ 13:43 ] - It can be difficult to determine that a deck is out of code!
[ 14:30 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
Chattanooga v. Fidelity - https://www.plrb.org/documents/ordinance-or-law-ho149/
Webinar: Cracking the Code: Navigating the Complexities of Ordinance or Law Coverage - https://www.plrb.org/courses/cracking-the-code-navigating-the-complexities-of-ordinance-or-law-coverage/lessons/cracking-the-code-navigating-the-complexities-of-ordinance-or-law-coverage/
Adjuster Resource Sheet: Ordinance Or Law Issues - https://www.plrb.org/documents/adjuster-resource-sheet-ordinance-or-law-issues/
State-By-State: Tennessee: Faulty Workmanship - https://www.plrb.org/documents/tennessee-faulty-workmanship/
Tennessee Mountains Stack Cake Recipe - https://www.food.com/recipe/tennessee-mountains-stack-cake-46814
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/ask-plrb/) at no additional charge to you or your company.
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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
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