Code Upgrade
The cost to bring repaired or rebuilt property into compliance with current building codes, often covered only under ordinance or law coverage.
Code upgrade costs are the incremental expenses to install modern electrical, structural, fire suppression, wind, or accessibility features required by law when rebuilding after a loss. Standard replacement cost coverage pays to restore like kind and quality to the pre-loss design — not the upgraded code-compliant design.
Ordinance or Law Coverage C is the typical mechanism for insuring code upgrades. Without it, the property owner funds mandated improvements out of pocket.
Examples
After hail damage, the city requires Class 4 impact-rated shingles on the entire roof when more than 25% is replaced; the extra cost over matching original shingles may fall under ordinance or law if purchased.
Common Misconceptions
Assuming matching statute or code upgrades are included in base RCV is a common error. Confusing cosmetic upgrades with legally mandated code compliance also causes disputes.
Related Terms
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Back to Glossary Claims Pages AcademyThis definition is provided for informational and educational purposes. Insurance terminology may vary by jurisdiction, policy, and context. Consult a licensed professional for guidance specific to your situation.
