Rental property owner in CA. Water damge due to upstairs bath running for three days. Insurance company is covering all damage to floors, walls, etc… City building inspector says we have to bring all 1930’s knob and tube electrical wiring up to code. Approx $30,000 job. Would not have had to do this except it was observed by virtue of Inspector coming through house to see other damage. Is insurance company requred to pay for this mandated code compliance upgrade even though not directly damaged by water incident?
Policy Language "Building Ordinance or Law: We, (the insurance company), will pay the increased costs which are required and you actually incur to comply with any ordinance or law governing the rebuilding, repair or demolition of the damaged property."