Will a Policy Exclusion or Limitation for Increased Costs of Construction Due to Changes in Building Codes Limit Recovery for Building Losses in California?

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Larry Arnold

According to the Ninth Circuit, in the unpublished opinion of Sierra Pacific Power Company v. Hartford Steam Boiler, perhaps not.  The Ninth Circuit found that the policy exclusion exclude damages caused by the peril of building ordinances, but not the increased construction costs caused by intervening building ordinances when the loss itself was caused by a covered peril.  The court further found that there was no similar limiting language in the valuation section of the policy or in the insuring clause contrary to the standard form fire policy found in California Insurance Code Section 2071.[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” id=”blogControls” enable_gradient=”true” color_overlay_2=”#ffffff” gradient_direction=”left_t_to_right_b” overlay_strength=”1″ shape_divider_position=”bottom” shape_type=””][vc_column column_padding=”padding-4-percent” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”small_depth” column_border_radius=”none” width=”1/1″ tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid”][divider line_type=”Small Line” line_thickness=”5″ divider_color=”accent-color” custom_height=”10″ custom_line_width=”42″][nectar_btn size=”large” button_style=”see-through-2″ color_override=”#465c71″ hover_color_override=”#ffffff” hover_text_color_override=”#000000″ icon_family=”fontawesome” el_class=”bioBTN” url=”/larry-arnold/” text=”Attorney Bio” icon_fontawesome=”fa fa-user-circle-o” margin_top=”24″ margin_right=”20″ margin_bottom=”-1″][nectar_btn size=”large” button_style=”regular” button_color_2=”Accent-Color” color_override=”#465c71″ icon_family=”none” url=”/robert-lamm/” text=”Back to Blogs” margin_top=”20″ margin_bottom=”-1″][/vc_column][/vc_row]