06/17/2026
Are you accounting for “hidden” rebuild costs in your investment properties?
Building codes are constantly evolving at the state and local level. While many older properties are “grandfathered in,” that protection can disappear the moment you file a claim.
If your property experiences a covered loss, you may be required to bring the entire building up to current code before repairs are approved (even if parts of the property weren’t damaged).
Here’s what you should know: A standard insurance policy typically only covers the cost to restore the property to its previous condition. That means any additional upgrades required by new ordinances (like updated wiring, fire safety systems, or structural changes) could come out of your pocket.
💡 This is where NREIG's Ordinance or Law coverage comes in. It can help cover:
• Required upgrades to undamaged portions of the building
• Demolition costs if code requires a full rebuild
• Increased construction costs due to modern material or safety requirements
Real-world example:
A fourplex suffers a partial loss, but during inspection, it’s discovered the property doesn’t meet current fire safety codes. Now, ALL units must be upgraded, not just the damaged ones. Without Ordinance or Law coverage, those added costs fall entirely on the owner.
If you don't have Ordinance or Law coverage on your investment properties, it may be worth discussing. Contact us today!