Demolition is one of three components of Ordinance/Law insurance. What does this component cover?

• A. The cost of demolishing damaged portions of the building.
• B. The cost of demolishing any undamaged portion of a building.
• C. The cost of demolishing the entire building after a loss.
• D. The cost of building a new structure after demolition.

Answer: (B)

Demolition coverage in Ordinance/Law insurance is about the costs required to remove parts of a building that are not damaged, when that removal is needed to meet current building codes or to eliminate hazards after a loss. The insurer pays to demolish undamaged portions so rebuilding can proceed under today’s codes or to clear the site. It does not cover demolishing the portion that was damaged, nor does it cover demolishing the entire structure or building a new one—that falls under other components of Ordinance/Law coverage.