As city planners for Bainbridge Island and other communities throughout Puget Sound work to update their Shoreline Management Plans (SMP), they consistently increase building setbacks and native vegetation zones. Existing structures, legally permitted and built under previous land use regulations, often become “nonconforming” under the new regulations.
A question has come up here and elsewhere about how nonconforming status will impact insurance costs. To find the answer we reached out to Larry Sears, a long-time Bainbridge Island resident, shoreline homeowner, and owner of Sears & Associates insurance brokers and agents in Winslow.
Here is his reply…
The insurance carriers we have chosen to insure our clients do not address the non-conforming issue directly. In general terms coverage is on a “Replacement Cost Basis” new for old at the current site or another location.
If the insured cannot rebuild at their current site the carrier’s obligation is replacement cost as if rebuilt on the original site. The additional costs to rebuild at a conforming property could be substantial with architectural & engineering fees, underground utilities, foundation, landscaping, etc., which are not covered unless damaged.
The permitting process to rebuild, replace or remodel in a non-conforming location usually increases the time and cost over a conforming location and there are several coverage options one should consider.
Coverage considerations:
Increased Cost of Construction also known as Ordinance and Law pays for the additional costs to meet current building codes.
Loss of Use — The time to rebuild or repair. Some companies have limitations of 12 months and or a maximum coverage amount. Chubb Companies have no time or dollar limitation other than a “reasonable time period to rebuild”. Other companies have 24 months of coverage. Since the permitting process alone can take a year or more, this should be an important consideration.
Reconstruction costs are normally greater in nonconforming areas as contractors are seeking approvals from multiply governmental agencies before during and after construction. Building material requirements in shoreline locations may be more stringent and construction fees greater.
If you have questions about increased cost of coverage for your home, give Larry or your insurance agent a call. If you think the city should make sure that existing homes are not defined as nonconforming under the new SMP — they do have that option — contact the planning commission and our city council members and let them know.
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