What type of insurance covers costs associated with demolition when mandated by zoning requirements?

Demolition insurance specifically addresses the costs related to demolition that may be required due to zoning requirements or regulations. This type of coverage is essential for property owners and developers who might face mandatory demolition of structures to comply with local zoning laws or planning decisions. It ensures that the financial burden of demolition is mitigated, as this can be a significant expense that arises unexpectedly when local ordinances require changes in land use or building modifications.

Other types of insurance, such as liability insurance, property damage insurance, and coinsurance policies, do not provide the specific coverage required for demolition costs associated with zoning mandates. Liability insurance typically covers claims for bodily injury or property damage caused by the insured, while property damage insurance deals with damage to physical assets. A coinsurance policy pertains to shared coverage arrangements and does not address the demolition costs linked to compliance with zoning laws. Therefore, demolition insurance is the most relevant and appropriate type of coverage for this situation.