What is Ordinance or Law Coverage?
What Is Ordinance or Law Coverage in Florida?
Ordinance or Law Coverage is property insurance coverage for increased costs caused by the enforcement of building codes, laws, or ordinances after a covered loss.
A standard replacement cost policy may pay to repair covered damage, but it may not automatically pay the extra cost to bring the property into compliance with current code. Ordinance or Law Coverage helps fill that gap.
Under Florida Statute § 627.7011, law and ordinance coverage may be limited to 25% or 50% of the dwelling limit, depending on the coverage selected by the policyholder. If the insurer does not obtain a written rejection, a homeowners policy covering the dwelling is generally deemed to include law and ordinance coverage limited to 25% of the dwelling limit.
Why Is Ordinance or Law Coverage Important for Florida Property Owners?
Ordinance or Law Coverage matters because Florida building codes change over time, especially after hurricanes and major storm events.
A home or commercial building constructed years ago may not meet current requirements for roofing, wind resistance, opening protection, electrical systems, plumbing systems, elevation, floodplain compliance, or other code-related issues.
After a covered loss, the local building department may require repairs that go beyond replacing what was damaged. Without adequate Ordinance or Law Coverage, the property owner may be left paying for required code upgrades out of pocket.
Does Florida Law Require Homeowners Policies To Include Ordinance or Law Coverage?
Florida law requires insurers issuing homeowners policies to offer replacement cost coverage options that include costs necessary to comply with applicable laws and ordinances, subject to policy provisions. The statute also allows additional law and ordinance costs to be limited to 25% or 50% of the dwelling limit, depending on the policyholder’s selection.
The Florida Department of Financial Services also explains that insurers regulated by the Office of Insurance Regulation are required to include Ordinance and Law Coverage of at least 25% of the home’s coverage amount and must offer 50%.
Policyholders should always check the declarations page and endorsements to confirm the exact limit, exclusions, and conditions that apply.
What Does Ordinance or Law Coverage Pay For?
Ordinance or Law Coverage may help pay for code-related costs that would not be included in a basic repair estimate.
Depending on the policy, this may include the increased cost of construction required to comply with current code, demolition of undamaged portions of the structure when required by law, debris removal related to code-required demolition, and the value of undamaged portions that must be removed because of code enforcement.
For example, if a covered fire, hurricane, or water loss damages part of the structure and the building department requires additional code-compliant repairs, Ordinance or Law Coverage may help pay the difference between ordinary repair costs and required code-compliant work.
What Is the 50% Rule in Florida Property Damage Claims?
The “50% rule” often refers to substantial damage or substantial improvement rules used in floodplain and local building code enforcement.
In Hillsborough County, when the cost to repair a building damaged by any cause equals or exceeds 50% of the structure’s market value before the damage occurred, the building may be deemed substantially damaged. Substantial damage can require the owner to bring the structure into compliance with current floodplain and building requirements.
This issue can become extremely important after hurricanes, flooding, storm surge, fire, or other major losses. The rule does not always mean the building must automatically be demolished. Still, it may require costly compliance work, elevation, reconstruction, or code upgrades depending on the property, location, and local requirements.
Does Ordinance or Law Coverage Apply to Roof Replacement Claims in Florida?
Yes, it can. Florida roof claims often involve code disputes because the Florida Building Code limits how much of an existing roof or roof section may be repaired, replaced, or recovered within 12 months unless the full roof system or roof section is brought into code compliance.
The 2023 Florida Building Code provision commonly referred to as the 25% rule addresses this issue.
However, Florida law also includes an important exception. Under Florida Statute § 553.844(5), if an existing roofing system or roof section was built, repaired, or replaced in compliance with the 2007 Florida Building Code or a later edition, and 25% or more is being repaired, replaced, or recovered, only the repaired, replaced, or recovered portion must be constructed under the current code.
This is why roof claims are frequently disputed. Insurers, contractors, engineers, and building officials may disagree over whether a full roof replacement is required, whether the 25% rule applies, whether the statutory exception applies, and whether Ordinance or Law Coverage must pay for the increased cost.
Who Needs Ordinance or Law Coverage in Florida?
Ordinance or Law Coverage is important for many Florida property owners, especially owners of older homes, coastal properties, commercial buildings, condominium buildings, and structures with original roofing, electrical, plumbing, or exterior systems.
The older the structure, the more likely it is that current code requirements may differ from the standards in place when the property was built. That gap can become expensive after a covered hurricane, wind, fire, water, or structural damage claim.
Property owners should review their Ordinance or Law Coverage before a loss occurs, not after the building department requires upgrades.
How Much Ordinance or Law Coverage Should a Property Owner Carry?
The right amount depends on the property’s age, location, construction type, roof condition, flood zone, current code compliance, and rebuilding cost.
Florida homeowners’ policies may include 25% of the dwelling limit unless rejected, and insurers must offer 50% coverage. A home insured for $400,000 with 25% Ordinance or Law Coverage would have $100,000 available for covered code-related costs. If the policyholder selected 50%, that limit would be $200,000.
Property owners should speak with their insurance agent before a loss to determine whether their current limits are enough for the age and condition of the property.
What Does Ordinance or Law Coverage NOT Pay For?
Ordinance or Law Coverage generally does not pay for every upgrade a property owner wants.
Depending on the policy, it may not cover voluntary improvements, maintenance, repairs unrelated to the covered loss, pre-existing code violations, upgrades not required by law, or costs caused by excluded damage. It also may not apply if the code issue is triggered by a voluntary renovation rather than a covered insurance loss.
Because exclusions and limits vary by policy, the endorsement wording controls what the insurer must pay.
What Should Florida Policyholders Do When a Claim Involves Code Compliance Issues?
Policyholders should first review the declarations page and endorsements to confirm whether Ordinance or Law Coverage applies and what limit is available.
They should also obtain written documentation from the building department, contractor, engineer, or qualified professional explaining what code upgrades are required and why. The repair estimate should separate ordinary repair costs from code-required costs so the insurer cannot blur the distinction between covered damage and increased compliance expenses.
Timing also matters. Under Florida Statute § 627.70132, an initial or reopened property insurance claim is generally barred unless notice is given within 1 year after the date of loss, and a supplemental claim is generally barred unless notice is given within 18 months after the date of loss.
Can a Florida Property Insurance Lawyer Help with an Ordinance-or-Law Claim?
Yes. Ordinance-or-Law claims can be highly technical because they involve both insurance policy language and building code requirements.
A Florida property insurance lawyer can review the policy, analyze the insurer’s denial or estimate, determine whether code-required upgrades were wrongly excluded, and work with contractors, engineers, or building officials to document what the law actually requires.
This matters because insurers may try to classify required code upgrades as optional improvements, maintenance, or uncovered work. If the insurance company refuses to pay covered Ordinance-or-Law benefits, Williams Law Association, P.A. can review the claim and help determine whether the insurer is improperly withholding payment.