Under which coverage would an insured be required to install a sprinkler system when rebuilding after a total loss due to new building codes?

The requirement for an insured to install a sprinkler system when rebuilding after a total loss due to new building codes falls under ordinance or law coverage. This type of coverage addresses the costs associated with changes in building codes or laws that occur after a loss. When a property is rebuilt, if local regulations mandate the installation of certain features, such as a sprinkler system, the ordinance or law coverage helps cover these additional expenses that would not be included in a standard building coverage policy.

This is essential because standard building coverage typically only pays for rebuilding to the original state without accounting for any upgrades or compliance with current building standards. The ordinance or law coverage allows policyholders to stay compliant with evolving regulations, ensuring that their reconstructed property meets all legal requirements.