By Jordan Lair | MBG Insurance October 26, 2026
If lightning damages your home’s electrical panel or a fire destroys part of your house, you expect your homeowners insurance to help with repairs. But what happens when your city requires those repairs to meet building standards that did not exist when your home was built?
Replacing what was damaged and rebuilding to current code can involve different costs. Ordinance or law coverage helps address eligible additional expenses required to comply with building codes after a covered loss.
For homeowners in Missouri, Arkansas, and Kansas—especially those with older homes—this coverage deserves a closer look.
What Is Ordinance or Law Coverage?
Ordinance or law coverage helps pay certain increased repair or rebuilding costs resulting from the enforcement of applicable building codes or laws after covered damage.
Building standards change over time. Requirements for electrical systems, structural connections, insulation, and other construction features may be different today than when your home was built.
An older home may be allowed to remain as it is, but repairs after a loss can trigger requirements to update the affected work. The scope depends on local rules, the damage, and the repairs being performed.
Depending on the policy, ordinance or law coverage may help with required upgrades, demolition, and work involving undamaged portions of a covered structure. Coverage is subject to its own terms and limits.
Example: Lightning Damages an Older Electrical Panel
Imagine you own a home built in the 1960s that still has an older 60-amp or 100-amp electrical service.
Lightning strikes the home and damages the main electrical panel. During the repair process, the electrician obtains a permit and determines what the local building department requires.
Replacing the damaged equipment may involve more than installing an equivalent panel. Current requirements could call for changes to grounding, bonding, service equipment, or other parts of the installation.
If the applicable code and the home’s calculated electrical load require a larger service, the repair might also involve upgrading to a 200-amp system.
A damaged 100-amp panel does not automatically mean the city will require 200-amp service. Service sizing depends on electrical demand, applicable code, and the work involved—not simply the home’s age or square footage.
For this example, assume the building department requires the upgrade as part of repairing a covered lightning loss. The cost to replace the damaged equipment and the additional cost to meet those requirements may be handled under different parts of the homeowners policy.
That additional, required code compliance expense is where ordinance or law coverage may help.
Choosing a larger panel solely because you want room for future appliances is a different situation. A voluntary improvement does not automatically become a covered code upgrade.
Other Examples of Code Requirements After a Covered Loss
Electrical panels are one example. Required upgrades can also arise during other repairs.
Roof Repairs After Storm Damage
After covered wind damage, replacing a roof may require updated fastening methods or other locally required construction details.
The additional expense of complying with those requirements may qualify under ordinance or law coverage, depending on the policy and the repair circumstances.
Rebuilding After a House Fire
A fire may damage an older section of your home. During reconstruction, applicable codes could require updated electrical protection, insulation, or structural work.
Even if you rebuild the same size home, those requirements can make the project more expensive than simply replacing the original construction.
Required Work on Undamaged Areas
In some circumstances, local rules may require work beyond the portion directly damaged by the loss. Certain policies provide ordinance or law protection for qualifying work involving undamaged portions or required demolition.
That does not mean a partial loss automatically pays to update the entire house. The specific code requirement and policy language determine what qualifies.
Doesn’t Replacement Cost Coverage Already Pay for This?
Replacement cost coverage and ordinance or law coverage address different parts of the rebuilding expense.
Replacement cost generally addresses repairing or replacing covered damaged property with materials of like kind and quality, subject to the policy’s requirements.
Ordinance or law coverage addresses eligible additional costs associated with legally required changes.
Having replacement cost coverage does not, by itself, establish how much protection you have for code upgrades. Your policy may include an ordinance or law allowance, offer an endorsement, or provide different terms.
When comparing homeowners insurance in Missouri, Arkansas, and Kansas, review both the dwelling coverage and the protection available for required code compliance.
Is Ordinance or Law Coverage Only Important for Older Homes?
Older homes deserve particular attention because more building standards may have changed since construction.
However, newer homes can also face updated requirements. A home does not have to be historic to encounter a code change during repairs.
Consider reviewing this coverage if:
- Your home has older electrical, plumbing, or structural systems.
- Major portions of the home have not been updated in many years.
- Your property has undergone additions or renovations.
- Your home has custom construction or complex rebuilding needs.
- You are unsure what ordinance or law protection your policy includes.
How Much Ordinance or Law Coverage Do You Need?
Some policies express the limit as a percentage of the dwelling coverage amount. Options and included limits vary by insurer and policy.
For example, if your home has $400,000 in dwelling coverage:
| Ordinance or law percentage | Corresponding limit |
|---|---|
| 10% | $40,000 |
| 25% | $100,000 |
These are illustrations, not a statement of what your policy includes. Review how the limit applies and whether eligible expenses are payable in addition to your dwelling limit. Percentage-based limits such as 10% and 25% are examples identified in Progressive’s coverage explanation.
The appropriate amount depends on your home’s age, construction, updates, local requirements, and available policy options. A percentage that sounds substantial may still leave a gap when major work is required.
Why High-Value Homeowners Should Review This Coverage
A high dwelling limit does not automatically answer every question about rebuilding.
Custom construction, extensive electrical systems, and complicated structural designs can make repairs more involved. Required code changes can add another layer of expense.
If you own a custom or luxury property, review ordinance or law protection alongside the other features of your high-value home insurance.
The goal is to understand how the policy handles both rebuilding the home and meeting applicable legal requirements along the way.
What Does Ordinance or Law Coverage Not Do?
Ordinance or law coverage generally does not pay to modernize your home simply because standards have changed.
It is not a substitute for maintenance, and it generally does not fund code upgrades during a voluntary renovation without a qualifying covered loss.
For example, an aging electrical panel that needs replacement because it is worn out presents a different situation from a panel damaged by covered lightning.
The policy may also exclude certain costs or restrict coverage for preexisting violations. Do not assume that every item an inspector identifies will be covered.
What Should You Do if a Claim Requires Code Upgrades?
Ask your contractor to separate the cost of repairing the direct damage from the additional work required by code.
When possible, obtain:
- The applicable code section or written building department requirement.
- An itemized estimate identifying the required changes.
- Permit and inspection documentation.
- Photographs and records supporting the scope of work.
Share that information with your adjuster before authorizing nonemergency upgrades. Clear documentation helps distinguish required work from optional improvements.
Review Your Coverage Before You Need to Rebuild
After a loss, discovering that repairs must meet newer standards can create an unexpected financial burden. Reviewing ordinance or law coverage ahead of time helps you understand the protection available.
At MBG Insurance, we help homeowners compare coverage from carriers that fit their homes and insurance needs. That review includes more than the premium—it includes the provisions that can matter when repairs become complicated.
With offices in Springfield, Missouri; Oak Grove, Missouri; and Bentonville, Arkansas, we help homeowners across Missouri, Arkansas, and Kansas review their options.
Contact MBG Insurance to review your homeowners policy and ask how it addresses rebuilding to current code standards.
About the Author
Jordan Lair is an insurance agent with MBG Insurance whose areas of focus include homeowners insurance, high-value homes, auto insurance, umbrella coverage, rental properties, and recreational insurance.
Examples are illustrative. Coverage depends on the cause of loss, applicable code requirements, and the policy’s terms, conditions, limits, and exclusions.