Building codes may require the demolition of damaged buildings, sometimes even buildings where actual fire or other damage was relatively small.

When this occurs, there are three different losses which can be enormously costly, and very often uninsured:

  • Value of the remaining (undamaged) portion of the building is lost.
  • Cost of demolishing the remaining structure & cleaning up debris.
  • Cost of improvements to comply with current building codes.

Clearly this comes into play on older structures, but can also affect more modern buildings, given the ever-more-stringent codes being enacted.  Political pressures for A.D.A., fire sprinkler systems, earthquake-resistance and other code requirements have grown exponentially. Standard fire insurance policies do not provide for any of these costs, however generally offer it as an option.

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