Building ordinance insurance covers your building in the event that over 51% is destroyed and the village or city ordinances do not allow you to rebuild the portion that was damaged, and instead require you tear down and rebuild the entire building. Your standard insurance policy would pay for the damaged portion of the building and no more.
The following are important components to the Building Ordinance policy:
Coverage A - Covers loss in value of the undamaged portion of the building due to demolition because of a building ordinance or law.
Coverage B - Covers the cost of demolition and debris removal of the undamages portion of the building if the building ordinance requires demolition.
Coverage C - Covers the increased cost to repair, reconstruct of remodel damaged or undamaged parts of the building to comply with a building ordinance or law.