Ordinance or Law
Ordinance or law coverage is an endorsement on a homeowners policy that pays the added cost of bringing a repaired or rebuilt structure into compliance with current building codes, beyond what restoring only the damaged portion would cost.
What does ordinance or law coverage pay for?
A complete ordinance or law endorsement includes three components. The first covers the loss in value of the undamaged portion of a structure when local code prohibits rebuilding it in its original form. The second pays demolition and removal costs for that undamaged section before reconstruction can begin. The third pays the increased construction cost to bring repaired or rebuilt sections up to current code rather than simply restoring them to pre-loss condition. For example, a kitchen fire in a 1975 home may require updated electrical circuits, arc-fault interrupters, GFCI outlets, and code-compliant HVAC venting throughout every opened wall cavity — none of those upgrades are optional once a contractor pulls the permit.
Why do standard homeowners policies leave this gap?
A standard homeowners policy pays to restore the damaged portion of a home to its pre-loss condition and nothing more. Building codes change over time, and older homes often carry wiring, plumbing, roofing systems, or structural elements that were legal when built but no longer meet current standards. The gap between restoring an old structure and satisfying a current permit can reach tens of thousands of dollars on pre-1990 homes. Without this endorsement, that gap falls entirely on the homeowner.
How does ordinance or law coverage apply in Georgia?
In Georgia, local building departments enforce the state-adopted building code, and repair permits trigger compliance reviews on all work within the affected area. A roof claim in Fulton County or a fire loss in a Savannah historic district can surface code upgrade requirements that homeowners do not expect until the contractor pulls the permit. Coastal counties subject to wind-load and impact-resistant glazing requirements under the Georgia Amendments to the International Building Code add another layer. For example, a coastal homeowner who suffers a partial roof loss may find that current wind-mitigation codes require full roof-deck replacement and hurricane straps throughout the structure, not just repair of the damaged section.
What coverage limit is appropriate for ordinance or law protection?
A 10 percent or 25 percent limit based on the dwelling coverage amount is standard, but actual code upgrade costs on a substantial loss can exceed those thresholds on older or larger homes. Homes built before 1990 and structures in Georgia historic districts or coastal wind zones carry the greatest exposure. A coverage review can match the right limit to your home’s specific situation.
What is the difference between ordinance or law coverage and base dwelling coverage?
Dwelling coverage pays to repair or replace the physically damaged portions of your home. Ordinance or law coverage pays the additional amount needed to satisfy code requirements during that repair — the cost above and beyond the base policy. The two work together: dwelling coverage funds the baseline repair, and the ordinance or law endorsement funds the code-compliance gap. Knowing which coverage handles what prevents surprises when a claim estimate comes back higher than expected. Learn more about home insurance options available through Olive Cover.