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

By August 22, 2012 October 25th, 2018 Insurance Blog, Larry Arnold
Larry Arnold

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According to the Ninth Circuit, in the unpublished opinion of Sierra Pacific Power Company v. Hartford Steam Boiler, perhaps not.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.