Glossary

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.

Also called: law and ordinance coverage, code upgrade coverage, building code coverage, HO 04 77

Ordinance or law coverage pays the increased cost of repairing or rebuilding a damaged home when a building code or zoning law requires work the old house never had to meet. Think of arc-fault wiring, new stair and railing rules, egress windows, wind-resistance requirements or a required raise above flood level. The standard ISO homeowners form includes a built-in allowance equal to 10% of the Coverage A limit, and the endorsement HO 04 77 can raise it, with higher percentages such as 25% or 50% available.

Say your dwelling limit is $400,000. The built-in allowance would give you $40,000 toward code costs after a covered loss. If the building department then requires $75,000 of upgrades on a rebuilt home, you cover the $35,000 gap unless you bought more. The coverage can also pay to demolish the undamaged part of the structure when the code requires it.

Two limits catch owners. It responds only when a covered loss triggers the code requirement, not when you decide to remodel, and it pays costs as you incur them. Floods have their own version, increased cost of compliance. For the full picture read ordinance or law coverage: paying to rebuild to code, and see building code upgrade for the work itself.

Last reviewed October 10, 2026

In the index now

Related terms

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. 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. Extended replacement cost Extra dwelling coverage, often 25% or 50% above the Coverage A limit, that helps pay to rebuild when the actual cost after a loss exceeds the limit. 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. Replacement cost What it would cost to repair or rebuild with materials of like kind and quality at today's prices, with no deduction for age or wear.

Related guides

The additional coverages hiding in your policy The standard HO-3 lists a dozen small coverages after Coverage D, from tree removal to fire department charges. Here is what each pays and where it falls short. Insuring an ADU or backyard cottage How a detached or attached accessory dwelling unit fits a homeowners policy, and what changes once family, a long-term tenant or a short-term guest lives in it. How the age of your home affects insurance Older homes cost more to insure and can be harder to place because of aging wiring, plumbing and roofs. Newer homes earn credits that fade. What to document. Building materials, labor shortages and claim costs Materials and labor both cost far more than in 2020. Federal price data, a 2026 contractor survey, and how repair costs reach your claim and your premium. The California FAIR Plan explained What the California FAIR Plan covers and leaves out, how to pair it with a DIC policy, how it is funded, and how to move back to a regular insurer. Chimneys, wood stoves and fireplace fires Fire and smoke damage from a chimney, stove or fireplace fire is covered; a neglected chimney is not. What insurers ask about wood heat, and how claims run.

Related insurers

Hyundai Marine & Fire Insurance U.S. branch of a large South Korean insurer that writes Hawaii homeowners and hurricane-only policies sold by Hawaiian Hurricane Group via independent agents. Pacific Specialty Insurance Family-owned California insurer founded by Jack McGraw in 1976, selling homeowners, landlord, condo, renters and mobile home policies through agents.

Related tools

Homeowners coverage gap checker Tick the 16 statements that are true of your homeowners policy and the checker lists the gaps to fix or raise with your agent before renewal. Homeowners quote comparison worksheet Enter up to five homeowners quotes in columns and see where the coverage differs, so the cheapest price is not just the least coverage. Home replacement cost estimator Estimate what it would cost to rebuild your house from the ground up, the number your dwelling coverage should match, using a per-square-foot cost you supply.