Arkansas Insurance Adjuster Practice Exam

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After a loss covered under a dwelling policy, what does Ordinance or Law coverage pay for?

  1. The remaining mortgage value

  2. Increased repair costs due to laws or codes

  3. Personal property replacement

  4. Temporary housing

The correct answer is: Increased repair costs due to laws or codes

Ordinance or Law coverage pays for increased repair costs due to laws or codes. This type of coverage is typically included in dwelling policies and is designed to help cover the additional expenses that may arise during the repair or rebuilding process. The coverage helps pay for any necessary changes or upgrades required by local building codes or government ordinances. Option A is incorrect as it refers to the remaining mortgage value, which is not covered under Ordinance or Law coverage. Option C, personal property replacement, is also incorrect as this coverage is specific to replacing personal belongings, not repair costs. And while temporary housing may be covered under a dwelling policy, it is not the purpose of Ordinance or Law coverage.

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