Glossary

Building code upgrade

Work local building rules require when a damaged home is repaired or rebuilt, beyond restoring what was there, such as updated wiring or wind bracing.

Also called: code upgrade, code compliance cost, code items

A building code upgrade is work that the local building department requires when a damaged home is repaired, over and above putting back what was there. A permit for the repair brings current code into play, and current code often asks for more than the original construction did: GFCI and arc-fault protection, interconnected smoke alarms, stronger roof-deck nailing and underlayment, wind-rated garage doors, updated insulation, or railings and stairs that meet today's dimensions.

The dwelling limit pays to restore the home to its prior condition. Code upgrades are the extra, and the policy pays them only through ordinance or law coverage coverage, which in the standard ISO form is a built-in 10% of the Coverage A limit unless you raised it. Costs matter more after widespread disasters, where jurisdictions often adopt tougher rules for rebuilds, and labor and materials are scarce.

Practical steps: ask the building official to list the required items in writing, have the contractor price them as separate lines, and give both to the adjuster before the work starts. Adjusters usually write code items as their own entries in the estimate, and many policies pay them as you incur them. A surprise bill midway through a rebuild is hard to recover. For the contractor side of the estimate, see xactimate, contractor bids and estimate disputes.

Last reviewed October 10, 2026

In the index now

Related terms

Ordinance or law coverage Coverage for the extra cost of repairing or rebuilding a damaged home to current building codes and zoning rules, which the dwelling limit does not pay. Replacement cost estimate A calculation of what it would cost to rebuild a home today, from its size, construction details and local labor and material prices. Dwelling coverage (Coverage A) The part of a homeowners policy that pays to repair or rebuild the house itself, including attached structures such as a garage, porch or deck. Xactimate Estimating software from Verisk that adjusters and contractors use to price repairs line by line from regional unit-cost price lists. Increased cost of compliance (ICC) Flood policy coverage of up to $30,000, apart from the damage claim, toward elevating, relocating or demolishing a substantially damaged building.

Related guides

The California Earthquake Authority explained What the CEA is, how its policies are sold through your home insurer, what they cover and exclude, how it is funded, and what its limits mean for homeowners. Earthquake deductibles: why they're so high Earthquake deductibles are a percentage of your dwelling limit, 5% to 25% at the CEA. Why they run that high, how they are applied, and how to choose one. Old wiring, electrical fires and insurability A fire from bad wiring is a covered fire loss, but the wiring is not, and old systems can get a home declined or nonrenewed. What insurers ask for. Extended and guaranteed replacement cost coverage Extended replacement cost adds a set percentage above your dwelling limit; guaranteed pays to rebuild whatever it costs. How each works, and the catches. Green rebuilding and eco-upgrade endorsements A standard policy rebuilds with like kind and quality, not greener materials. Green rebuilding endorsements pay the extra, and a few carriers still sell them. Insuring a historic home Historic status rarely changes your policy; rebuild cost does. Valuation basis, appraisal, code-upgrade coverage and old systems decide how it is insured.