Here is a sentence heard more than once from California homeowners after a fire: I had replacement cost, so why is there a gap? The policy paid to rebuild the house that stood there, but the city would not let them rebuild that house. The code can require today's standards: fire resistant siding, ember resistant vents, new electrical, maybe solar, maybe a sprinkler system. That difference has a name. It is ordinance or law coverage. Ep36: ordinance or law coverage after a fire is Aaron Bollinger of Bollinsure walking through it.

This article follows the show notes. It is not a claim estimate and not a building permit. The home insurance page is home insurance in California. The longer reading is the ordinance or law guide.

If you want the limit checked against a real house, Get quoted or call 562-268-9355.

Codes change, and grandfathering ends

The episode's point is that a house can be legal to keep and illegal to rebuild. Title 24 and the wildland urban interface rules in Chapter 7A of the California Building Code are the names the show notes use for that shift. Grandfathering, as the episode describes it, ends once a house is destroyed or badly damaged. The old building does not get to come back as the old building.

What a high fire hazard area can require, in the notes, includes a Class A roof, ember resistant vents, tempered or multi-pane glass, and defensible space. Around two minutes, the clarification is that "five sprinklers" means fire sprinklers. Some jurisdictions require fire sprinkler systems in new single family homes. Around the same stretch, the glass requirement is tempered or multi-pane glass. Those are examples of code items. They are not a list of what your city will require. The building department has that list.

What a standard policy gives you

Around three minutes, the show notes identify the ISO homeowners form as the HO 00 03, often called the HO-3. The episode describes an ordinance or law exclusion, and then a limited giveback: 10 percent additional coverage on that form. Ten percent of the dwelling limit is not the same thing as the cost of the code. On an older house in a fire zone, the code layer can be a large share of the rebuild. Ten percent is a start. It is not a match for every house.

Extended replacement cost is a different thing. The episode separates it from code upgrade coverage on purpose. Extra percentage for the cost of rebuilding the same house is not extra percentage for building a different house that meets today's code. Read the two endorsements as two jobs.

Three pieces on commercial forms

The notes name three pieces on commercial forms, CP 04 05 Coverage A, B, and C. This article does not expand those letters into coverages the show notes did not define in the summary. The point for a homeowner is that ordinance or law is not one bucket. Loss of the undamaged portion, the cost to demolish it, and the increased cost of construction can be split. A commercial policyholder should ask which of the three is on the form. A homeowner should ask the same question in the homeowners wording, because the job is the same even when the form number is different.

Why wildfires make the code layer large

The episode ties the size of the gap to wildfire country. When a house is a total loss, grandfathering is gone and the rebuild is a new house under current rules. The notes also name California's 36 month post-disaster replacement cost window. That window is about time to rebuild, not about the code items themselves. A time limit and a code limit can both run out. They are not substitutes for each other.

The clarification also notes that CEA earthquake policies include a separate building code upgrade limit, and that you should check the amount on your policy. Earthquake code upgrades are not the homeowners ordinance or law limit. Do not assume one fills the other.

How the episode says you can buy more

The show notes name HO 04 77 as the way to raise the homeowners ordinance or law limit, and they mention premium tiers. They also name the FAIR Plan with a difference-in-conditions policy, and commercial limits, as other structures people use when the admitted homeowners form is not the whole answer. This article does not price those tiers. Ask for the limit and the premium together.

What ordinance or law does not do, in the episode, is just as important. It does not pay for upgrades when there has been no loss. It does not pay for excluded perils such as earthquake, except for the separate CEA code limit just mentioned. It does not fix prior violations. It does not clean up pollutants. And a cash settlement is not the same path as a rebuild to code. Around nine and a half minutes, the clarification says "read the law settlement" means read the loss settlement and the ordinance or law wording together. The two sections have to agree before you know whether a cash-out leaves the code cost with you.

Daniel's Ventura County example

The episode uses one rebuild to make the percentages concrete. The code items are $140,000. With 10 percent ordinance or law, the notes say the gap left is $65,000. With HO 04 77 at 50 percent, the $375,000 limit covers the full $140,000. Those figures are the example from the show notes. They are not a quote for a house in Ventura County or anywhere else. Your dwelling limit, your percentage, and your city's list will not be Daniel's.

The arithmetic is the lesson. A small percentage of a dwelling limit can be smaller than the code. A larger percentage can cover the same code items with room left over. Room left over is not a reason to buy a limit you do not need. A gap is a reason to know the limit before the fire.

Four questions for this week

The episode closes with four questions to ask about your own policy. Use the recording for the wording. The useful papers are the declarations page, the ordinance or law limit or the statement that you do not have one, whether extended replacement cost is a separate endorsement, and how loss settlement works if you do not rebuild.

Bring those to Get quoted or call 562-268-9355. WJB Services, Inc. dba Bollinsure Insurance Services. California DOI agency license 6013787.

Frequently asked questions

If I have replacement cost, why would code upgrades be extra?

The episode's answer is that replacement cost pays to rebuild the house that stood there. The city may require a different house. Ordinance or law coverage is the name for that difference. A standard HO 00 03 giveback, as the notes describe it, is 10 percent additional coverage, which may be less than the code.

Is extended replacement cost the same as ordinance or law?

No. The episode separates them. Extended replacement cost is about the price of rebuilding the same house. Ordinance or law is about the cost of building to a code the old house did not have to meet.

What were the numbers in the Ventura example?

The show notes use $140,000 of code items. Ten percent ordinance or law leaves a $65,000 gap. HO 04 77 at 50 percent is described as a $375,000 limit that covers the full $140,000. Those figures are the example, not a quote.

Does ordinance or law pay for a remodel I wanted anyway?

No. The episode says it does not pay for upgrades when there has been no loss, and it does not pay excluded perils such as earthquake except for a separate CEA code limit you would check on that policy.

Primary Sources and Further Reading

This page is general educational information. It is not legal, tax, building-code, or coverage advice. Coverage, eligibility, and pricing depend on the carrier, underwriting, and your policy terms. No coverage is bound through this article.