A windstorm blew off a section of the exterior EIFS wall. The city requires the entire wall replaced to bring it up to code. This includes the undamaged sections of the exterior wall.
The carrier sent out an engineer who indicated that the EIFS wall was installed incorrectly. The carrier agreed to cover the wind damaged section of the wall only. The undamaged section is excluded due to improper installation.
Is the partial denial accurate?
Illinois Subscriber
The policy provides coverage for ordinance or law that includes the undamaged portion of the building. However, the following applies to that coverage:
When direct physical loss or damage is caused by or results from both: a peril not otherwise excluded; and an excluded peril, the valuation will not include the Ordinance Or Law costs attributable to the excluded peril. Instead, the valuation will be based on that portion of such costs equal to the proportion that the covered direct physical loss or damage bears to the total direct physical loss or damage, not including Ordinance Or Law costs, unless the Ordinance Or Law applies solely to that portion of the building or personal property which suffered the covered direct physical loss or damage.
Without this provision, there would be coverage for the undamaged portion of the building due to the wind covered cause of loss. However, because there is also an excluded peril, the faulty installation, and that undamaged portion of the building is affected by this peril, then the ordinance or law coverage will not extend to the undamaged portion of the building.
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.