Yes, the law requires an electrical outlet receptacle in a bathroom. The following code 2008 NEC (National Electrical Code) references state:
210.8 Ground-Fault Circuit-Interrupter Protection for Personnel.
(A) Dwelling Units. All 125-volt, single-phase, 15- and 20-ampere receptacles installed in the locations specified in (1) through (8) shall have ground-fault circuit-interrupter protection for personnel.
210.52 (D) Bathrooms.
In dwelling units, at least one receptacle outlet shall be installed in bathrooms within 900 mm (3 ft) of the outside edge of each basin. The receptacle outlet shall be located on a wall or partition that is adjacent to the basin or basin countertop, or installed on the side or face of the basin cabinet not more than 300 mm (12 in.) below the countertop.
Those requirements are the same for 1999, 2002 & 2005 NEC editions.
A general rule is that in case of a remodeling that involves complete replacement of the wall finishes (drywall, plaster, etc.) that concealed electrical components inside the wall, the exposed electrical wiring should be updated to the currently adopted / enforced local building code.
I’m not sure how would that apply to the insurance claims and you should probably contact your local building department and ask them about this situation.
I don’t think the building inspector would approve such installation any way since it is a safety issue; one of the reasons for a bathroom to have an electrical outlet receptacle is to prevent usage of extension cords for a hair dryer or other equipment (possibility of overheating, tripping, etc.)
You can check my post – bathroom GFCI
for more information about the bathroom's electrical wiring.
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