Building ordinance insurance is best described as:

• A. It pays for routine maintenance costs.
• B. It is property tax insurance.
• C. It covers only fire damage.
• D. Endorsement to a standard property policy insuring against loss caused by enforcement of ordinances or laws regulating construction and repair.

Answer: (D)

Building ordinance insurance is coverage attached to a standard property policy that pays the extra costs required to rebuild or repair a structure to comply with current building codes and laws after a covered loss. When a loss occurs, simply repairing to what existed before may not be enough because new codes can require upgrades—like updated wiring, plumbing, or structural changes—and possibly demolition of undamaged parts. This endorsement covers those additional costs beyond the basic repair up to the limits of the policy, ensuring the building is rebuilt in compliance with current ordinances. It’s not about routine maintenance, it’s not a tax insurance policy, and it isn’t limited to fire damage; it specifically addresses costs incurred because enforcement of construction and repair laws dictates more extensive rebuilding.