Building codes change over time, and when a property is repaired after a covered loss, current code requirements can sometimes require upgrades beyond simply restoring the property to its prior condition. This can become a relevant factor in an appraisal.
Many policies include specific coverage, often called ordinance or law coverage, that addresses the additional cost of complying with current building codes during repairs, though the scope and limits of this coverage can vary significantly by policy.
Code upgrade requirements can affect various aspects of a repair, from electrical and plumbing systems to structural elements, depending on the specific codes in effect in the property’s location and the extent of the damage.
Because code related costs can meaningfully affect the overall repair estimate, and because coverage for these costs depends on specific policy language, they can become a point of discussion or disagreement during the appraisal process.
Reviewing your policy’s specific language on ordinance or law coverage, and discussing any code related questions with your appraiser, can help clarify how this issue applies to your specific claim.
This article is general education about how the appraisal process commonly works. It is not legal advice, and specific procedures can vary by state and policy. If you have questions about your own claim, review your policy language and talk with your insurance company, agent, or an attorney familiar with your state’s laws.
Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Have a question about your own claim? Contact Appraisal Resolution.