Ordinance or Law Coverage
An insurance coverage, often added by endorsement, that pays the additional cost to bring a damaged building up to current building codes during repairs. Covers the gap between restoring to pre-loss condition and meeting current code requirements.
What Is Ordinance or Law Coverage
Ordinance or law coverage is an insurance provision, typically added by endorsement, that pays the additional cost required to bring a damaged building into compliance with current building codes, zoning laws, or other governmental regulations during the repair of a covered loss. Without this coverage, the insurance only pays to restore the building to its pre-loss condition, even if that condition no longer meets code. The gap between pre-loss condition and current code comes out of the homeowner's pocket.
Three Parts of O&L Coverage
Ordinance or law coverage typically has three components. Coverage A pays for the loss in value of the undamaged portion of a building that must be demolished due to a building ordinance. Coverage B pays for the cost of demolishing the undamaged portion and clearing the site. Coverage C pays for the increased cost of construction to meet current codes. For most roof claims, Coverage C is the relevant component. It covers the additional materials and labor required when current code demands upgrades beyond the pre-loss roof system.
O&L in Roofing Claims
Common code upgrades on roof claims include ice and water shield in eave areas (required by current code but not present on older roofs), upgraded ventilation to meet current standards, drip edge profile upgrades, and enhanced fastener patterns for wind resistance. Each of these upgrades is a legitimate line item under ordinance or law coverage. Without O&L coverage, the homeowner absorbs these costs. Contractors should check for O&L coverage early in the claim process and include code upgrade line items in every estimate where current code exceeds the original installation standard.
Frequently asked questions
Ordinance or law coverage pays for the increased cost to comply with current building codes when repairing storm damage. For example, if the building code now requires a different ventilation standard, upgraded electrical panel, or specific underlayment that was not required when the home was built, O&L coverage pays the difference between pre-loss condition and code compliance.
No. On many policies, ordinance or law coverage is an endorsement that must be purchased separately. Some policies include a basic amount (typically 10% of dwelling coverage) as part of the standard form. Check the declarations page and endorsements to confirm whether O&L coverage exists and what the limit is.
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