A standard homeowners policy generally pays to repair damage with like kind and quality, which is a different thing from paying to bring the repaired area up to today's code. When a 1970s house in southern Westminster is rebuilt after a kitchen fire, the inspector may require things that did not exist in the original: different electrical protection, updated smoke and carbon monoxide alarms, larger egress windows in bedrooms that were rebuilt, new insulation levels in opened exterior walls, or changes to stair rails.
Ordinance-or-law coverage, sometimes called building code upgrade coverage, is designed to pay for those added costs. Many policies include some amount of it, often as a percentage of the dwelling limit, and some offer more as an endorsement. The amount, and what it applies to, varies widely.
Coverage terms worth knowing
- Ordinance or law
- Policy coverage for costs caused by enforcement of building codes or ordinances during a covered repair.
- Coverage A
- The dwelling coverage in a typical homeowners policy, which pays to repair or rebuild the structure.
- Increased cost of construction
- The added expense of building to current code compared with replicating the original construction.
- Demolition cost
- Within ordinance-or-law, the cost of tearing down undamaged parts that code requires to be removed.
- Loss of value to undamaged portion
- Coverage some policies provide when code requires undamaged parts of a building to be torn down.
Upgrades that often come up in older homes
| Area | Possible requirement during repair | Who usually identifies it |
|---|---|---|
| Electrical | Arc-fault or ground-fault protection on new circuits; panel changes | Electrician and electrical inspector |
| Alarms | Interconnected smoke alarms; CO alarms near sleeping areas | Building inspector |
| Bedroom windows | Egress size if window openings are rebuilt | Building inspector |
| Exterior walls | Current insulation where walls are opened | Building inspector or energy code review |
| Stairs and rails | Rail height and baluster spacing if stairs are rebuilt | Building inspector |
| Gas appliances | Venting and combustion air changes on replacement | Mechanical inspector |
Building a clean record of required upgrades
- Ask your agent or adjuster how much ordinance-or-law coverage your policy includes.
- Ask the contractor to list code-required items separately on the estimate.
- Keep any inspector correction notices or written comments that require changes.
- Separate optional improvements you choose from code-required work.
- Send required-upgrade documentation to the adjuster as soon as it is known.
Common questions
What if my ordinance-or-law limit runs out?
Required work still has to be done to pass inspection, so any amount over the limit would generally fall to the owner. Raising this coverage at renewal is worth discussing with your agent, especially for older homes.
General information for Westminster, not a quote or professional advice. In an emergency, call 911.