Ordinance-or-Law Coverage Gap Analyzer

Estimate how much of your code-mandated retrofit exposure an ordinance-or-law endorsement will absorb by pairing your rebuild budget with policy limits, deductibles, and contingency allowances.

Contractor bid or insurer replacement cost estimate to rebuild the structure to pre-loss condition.
Portion of the rebuild budget triggered solely by updated building-code requirements.
Policy limit for ordinance-or-law or code upgrade coverage.
Deductible that applies before ordinance-or-law coverage responds.
Optional — defaults to 0.00%. Add a contingency allowance for permit delays, inflation, or unknown code items.

Insurance contract terms vary. Confirm definitions, limits, and covered improvements with your carrier or licensed agent.

Examples

  • Example 1 — $420,000.00 rebuild, 18.00% code upgrades, $60,000.00 limit, $2,000.00 deductible ⇒ Code-driven upgrade cost: $75,600.00 | Coverage available: $60,000.00 | Gap exposure: $15,600.00 | Total out-of-pocket incl. deductible: $17,600.00 | Coverage saturation: 79.37%
  • Example 2 — $525,000.00 rebuild, 12.00% code upgrades, $75,000.00 limit, $1,500.00 deductible, 5.00% contingency ⇒ Code-driven upgrade cost: $66,150.00 | Coverage available: $66,150.00 | Gap exposure: $0.00 | Total out-of-pocket incl. deductible: $1,500.00 | Coverage saturation: 100.00%

FAQ

Where do I find the code upgrade percentage?

Ask your contractor or adjuster for a breakdown of items triggered solely by ordinance or law changes, then divide that subtotal by the rebuild estimate to get the percentage.

Do detached structures count?

Yes. Include code-driven upgrades for detached garages or sheds in the rebuild estimate so they are reflected in the exposure.

What if my policy has multiple ordinance-or-law limits?

Use the limit that applies to Coverage A (dwelling) upgrades or sum the parts if your policy allows stacking. Run separate scenarios if limits vary by structure.

How can I close the coverage gap?

Discuss increasing the ordinance-or-law endorsement, adding inflation guard coverage, or self-funding a reserve equal to the gap exposure.

How should I pick a contingency percentage?

Review recent bids or talk with your contractor about material volatility and permitting backlogs; many homeowners model 5–15% depending on project complexity.

Does the calculator cover code upgrades for mechanical systems?

Yes. Include electrical, HVAC, seismic, and accessibility upgrades mandated by code in the code-upgrade percentage so they are reflected in the final gap.

Additional Information

  • Code upgrade percentage multiplies the rebuild estimate to isolate costs tied exclusively to compliance with newer ordinances.
  • Contingency percentage increases the budget to reflect volatile labor, materials, or permitting expenses.
  • Coverage saturation compares available insurance to the total projected code requirement, including contingency allowances.
  • Out-of-pocket exposure adds your deductible to uncovered code-driven expense so you know the cash reserve required.
  • Outputs format dollars with two decimals and percent saturation to two decimals for clean sharing with adjusters.

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