What Is Ordinance or Law Coverage in Home Insurance? 

When your home is damaged by a fire, storm, or another covered event, repairing it may involve more than replacing what was damaged. Your local building department may require parts of the home to meet current construction codes before repairs can be completed. 

Those required upgrades can increase rebuilding costs. Standard homeowners insurance may not cover the additional expense of complying with newer building codes unless your policy includes ordinance or law coverage.  

Ordinance or law coverage can help with expenses such as demolishing an undamaged part of a building when required by law, removing debris, or upgrading electrical, plumbing, roofing, and other systems to meet current codes. 

An InsureOne Insurance agent can help you review your homeowners policy, understand your ordinance or law coverage limit, and compare available options. 

What is ordinance or law coverage? 

Ordinance or law coverage helps pay additional costs caused by the enforcement of current building codes after a covered loss. 

A homeowners policy generally pays for covered damage according to the terms and limits of the policy. However, rebuilding a damaged home may require improvements that weren’t part of the home before the loss. 

For example, an older home’s electrical wiring, plumbing, windows, roofing, or other components may no longer meet the codes currently enforced by the local building department. If a covered fire damages part of the home, obtaining the necessary permits could require some of those systems to be updated as part of the repair. 

The National Association of Insurance Commissioners (NAIC) notes that standard homeowners policies don’t generally cover the added cost of bringing a damaged home into compliance with current local building codes unless ordinance or law coverage applies. 

Building standards also change over time. The International Code Council (ICC), whose model building codes are widely used throughout the United States, updates its International Codes on a three-year cycle. The exact requirements that apply to your home depend on the codes adopted and enforced by your state or local jurisdiction. 

How ordinance or law coverage works after a covered loss 

Ordinance or law coverage generally comes into play when two things happen: your home suffers damage from a cause covered by your policy, and a law or building code requires additional work as part of the repair or rebuilding process. 

A typical claim might work like this: 

1. A covered event damages part of your home. 

2. You report the loss to your insurer. 

3. The damage and covered repair costs are evaluated according to your policy. 

4. The local building department determines which current codes apply to the repair or reconstruction. 

5. If code compliance creates additional covered expenses, ordinance or law coverage may help pay those costs, subject to your policy’s limits and terms. 

For example, a fire might damage part of an older home’s electrical system. Replacing only the damaged wiring may not satisfy current local code requirements. If the building department requires additional electrical upgrades to complete the permitted repairs, ordinance or law coverage may help with the eligible additional cost. 

The coverage generally applies only when the underlying damage results from a covered cause of loss. If the homeowners policy excludes the event that caused the damage, ordinance or law coverage generally won’t turn that excluded loss into a covered claim. 

What can ordinance or law coverage pay for? 

Policy terms vary, but ordinance or law protection commonly addresses three types of expenses created by code enforcement after a covered loss. 

Loss to an undamaged part of the home 

Sometimes a local ordinance requires more of a structure to be removed or rebuilt than the portion directly damaged by the covered event. 

For example, a fire could seriously damage one section of a home while another section remains physically intact. If applicable building rules require the undamaged section to be removed as part of the reconstruction, ordinance or law coverage may help address that additional loss. 

The exact coverage depends on your policy and the requirements enforced by the local building authority. 

Demolition and debris removal 

Complying with an ordinance can also create demolition costs. 

If an undamaged part of the structure must be removed before the home can be rebuilt legally, ordinance or law coverage may help pay eligible costs associated with that demolition and removal. 

These expenses can include labor and disposal costs, subject to the policy’s terms and limits. 

Increased cost of construction 

Building codes may require materials, systems, or construction methods that weren’t used when your home was originally built. 

Depending on the local code and the work being performed, required upgrades could involve: 

• Electrical systems 
• Plumbing 
• Roofing materials or installation methods 
• Windows 
• Insulation 
• Smoke or carbon monoxide alarms 
• Structural or safety components 

The NAIC specifically identifies electrical wiring, plumbing, windows, and roofing materials as examples of items that may need to be updated to comply with current building codes after a loss. 

Ordinance or law coverage can help pay eligible additional costs required to bring covered repairs into compliance with current building codes. 

Examples of code-related rebuilding costs 

The actual upgrades required after a claim depend on the home’s location, age, type of damage, and the building codes in effect when repairs are permitted. 

Possible examples include: 

• Electrical: Replacing outdated wiring, outlets, panels, or other components when required by current electrical codes 
• Plumbing: Updating plumbing materials or configurations when the existing system doesn’t meet applicable requirements 
• Roofing: Using code-compliant roofing materials, underlayment, fastening methods, or structural connections 
• Energy efficiency: Updating insulation, windows, or other components when required by locally adopted energy codes 
• Safety: Adding required smoke alarms, railings, egress features, or other safety improvements 

Not every repair will trigger these requirements. The local building authority determines which codes apply to a particular project. 

How much ordinance or law coverage do you need? 

There isn’t one ordinance or law coverage limit that’s appropriate for every home. 

Some homeowners policies may include a limited amount of coverage, while others may allow policyholders to add or increase it. Check your declarations page and policy language rather than assuming a particular percentage is automatically included. 

If ordinance or law coverage is expressed as a percentage of your dwelling limit, you can calculate the available amount using that percentage. 

For example, if a home has $400,000 in dwelling coverage and the policy provides ordinance or law coverage equal to 10% of that amount: 

$400,000 × 10% = $40,000 

That example illustrates how a percentage-based limit works. It doesn’t mean every homeowners policy automatically includes 10% coverage. 

When reviewing your limit, consider: 

• The age of your home 
• The age of major systems, such as electrical and plumbing 
• Previous renovations or additions 
• Building requirements in your area 
• Your home’s dwelling coverage limit 
• The ordinance or law options available from your insurer 

Older homes may have a greater difference between their original construction and today’s requirements, making it particularly useful to review this coverage. 

Your premium may change if you add or increase ordinance or law protection. Ask your insurer or agent for the actual cost and available limits rather than relying on general estimates. 

You may also want to read: Breaking Down the Types of Homeowners Insurance Policies 

Why consider ordinance or law coverage? 

Homeowners insurance can provide an important source of funds after a major covered loss, but policy limits and exclusions still matter. Homeowners policies pay covered losses according to the terms, limits, and exclusions of the policy. 

Ordinance or law coverage addresses a specific potential gap: the additional expense created when current building requirements make repairs more extensive or expensive than simply restoring what was there before. 

This can be especially worth reviewing if: 

• Your home is older and has original or older systems. 
• Your area has adopted newer construction or energy codes since the home was built. 
• You’ve completed additions or renovations at different times. 
• You live in an area where wind, wildfire, seismic, or other risks have led to changes in construction standards. 
• A large code-related expense would be difficult to cover from savings. 

The ICC updates its model codes regularly as construction methods, technologies, and safety practices change, although individual jurisdictions decide which versions and provisions they adopt. 

Checking your coverage before a loss can help you understand how much protection you actually have for code-required rebuilding costs. 

What ordinance or law coverage doesn’t cover 

Ordinance or law coverage isn’t a general home-improvement benefit. 

It generally doesn’t pay for voluntary remodeling, routine maintenance, or upgrades you decide to make simply because you prefer newer materials or systems. 

Coverage also depends on the cause of the original loss. 

Homeowners insurance typically covers certain causes of damage identified in the policy, while other events may require separate coverage. For example, the NAIC notes that homeowners may need separate policies for flood or earthquake losses. 

If the underlying event isn’t covered by the applicable homeowners policy, ordinance or law coverage generally won’t provide coverage simply because rebuilding codes apply afterward. 

Always review the policy language for specific exclusions, limits, and conditions. 

How InsureOne Insurance can help 

Homeowners policies can include several limits, endorsements, and exclusions. InsureOne Insurance agents can help you review your current coverage, identify any ordinance or law protection included in your policy, and compare available options from multiple carriers. 

You can connect with InsureOne online, call 800-836-2240, or visit one of our offices to discuss your homeowners insurance options. 

Frequently asked questions 

Does ordinance or law coverage pay for voluntary renovations or upgrades? 

Generally, no. Ordinance or law coverage is intended for eligible additional costs required by building codes or laws after a covered loss. 

If you voluntarily remodel your kitchen, update your electrical system, or replace an undamaged roof without a covered loss triggering the work, ordinance or law coverage generally doesn’t pay for those improvements. 

The exact terms depend on your policy. 

Is ordinance or law coverage automatically included in homeowners insurance? 

It depends on the policy and insurer. 

Some homeowners policies may include a limited amount of ordinance or law coverage, while others may offer additional protection through an endorsement or other coverage option. 

The NAIC recommends checking the declarations page of your homeowners policy to determine if you have ordinance or law coverage. 

Does ordinance or law coverage apply to minor repairs? 

It can depend on the repair and the building codes that apply. 

The key issue isn’t simply whether the damage is considered minor or major. Ordinance or law coverage may become relevant when repairs after a covered loss trigger a code requirement that creates an additional covered expense. 

Your local building department determines which construction requirements apply, while your insurance policy determines which resulting expenses are covered. 

Can I increase my ordinance or law coverage? 

You may be able to request a higher limit, depending on your insurer and policy. 

Review your existing limit on your declarations page and ask your insurance agent about additional options. Availability, limits, underwriting requirements, and premium changes vary by insurer. 

Does ordinance or law coverage apply to flood or earthquake damage? 

Ordinance or law coverage generally depends on the underlying cause of loss being covered by the applicable policy. 

Standard homeowners insurance may not cover flood or earthquake damage, and separate coverage may be needed for those risks. 

Review your homeowners, flood, earthquake, or other applicable policy to understand how code-related rebuilding expenses would be handled after a particular type of loss.