In ordinance or law coverage CP 04 05, which coverage pays for loss to the undamaged portion of the building?

• A. Coverage A
• B. Coverage B
• C. Coverage C
• D. Coverage D

Answer: (A)

Ordinance or Law coverage addresses the extra costs that arise when building codes or laws change after a loss. The part that pays for loss to the undamaged portion of the building specifically covers the financial impact on the portion that was not damaged but must be altered, demolished, or rebuilt to comply with the current codes. In other words, it reimburses the value of the undamaged part that is affected by enforcement of ordinances or laws, up to the policy limit. The other two coverages deal with different costs: one covers demolition or removal as required by law, and the other covers the additional cost to reconstruct or repair to meet current codes. These do not describe the loss to the undamaged portion, which is why this coverage is the correct choice.