The Hidden Coverage That Can Make or Break a Rebuild in Chesterfield

When most homeowners think about insurance, they think about repairing or replacing what’s been damaged—roof, walls, flooring, furniture. But what if you were required to upgrade your home because of a new building code or safety regulation? Would your insurance pay for those added costs?

Not unless you have Ordinance or Law Coverage.

At Hoppy Insurance Agency, we often find that Chesterfield homeowners have no idea this coverage exists—until they’re stuck paying thousands in out-of-pocket costs after a claim.

In this post, we’ll explain what Ordinance or Law Coverage is, how it works, when it applies, and why every homeowner should know whether they have it.

What Is Ordinance or Law Coverage?

Ordinance or Law Coverage is an add-on or built-in provision in your home insurance policy that covers the extra cost to rebuild your home according to current building codes and laws, not just how it was originally built.

Here’s the catch: If your home was built years (or decades) ago, local codes may have changed. After a fire, storm, or other major damage, the county may require you to rebuild differently—and more expensively.

Without this coverage, your insurance policy may only pay to replace what was damaged as it was, not as it must be rebuilt today.

Real Example in Chesterfield

Let’s say your home was built in 1995 and sustains significant fire damage. You need to replace part of your electrical and plumbing systems. However, Chesterfield County now requires all new construction to meet stricter energy efficiency codes and updated wiring standards.

That means you can’t just rebuild what was there. You must meet today’s code—even in undamaged areas affected during reconstruction.

These upgrades aren’t typically covered under your dwelling limit unless you have Ordinance or Law.

We’ve seen cases where clients had to pay $10,000–$40,000 out of pocket because they didn’t have this coverage in place.

When Does Ordinance or Law Coverage Apply?

This coverage is triggered when:

Your home is partially or totally damaged
A portion must be rebuilt or replaced
Local code requires upgrades to affected parts (e.g., roof pitch, wiring, plumbing, ventilation, structural reinforcements, etc.)

It can also apply if:

The county requires demolition of undamaged portions of the structure
You must rebuild the entire home, not just what was destroyed
New zoning or accessibility rules apply to the rebuild

What Does It Cover?

Most Ordinance or Law endorsements include three main parts:

1. Coverage for Loss to the Undamaged Portion

If 40% of your home is damaged, but local law requires demolition of the other 60%, this coverage pays for the part that wasn’t physically damaged—but now must be torn down.

2. Demolition Costs

Covers the cost to safely tear down undamaged portions of the home to comply with current code.

3. Increased Cost of Construction

Covers the extra materials and labor required to meet modern building codes—like fire-resistant roofing, higher-grade insulation, or ADA-compliant bathrooms.

Without this, you’re stuck paying the upgrade costs out of pocket.

What’s Not Covered?

While Ordinance or Law Coverage is powerful, it doesn’t cover:

The cost to bring your entire home up to code if no covered loss occurred
Upgrades you simply want to make, rather than those required by law
Code violations that existed before the loss but were never corrected

Think of it as coverage that only activates after a claim event—and only for upgrades that are required, not optional.

Is This Coverage Automatically Included?

That depends on your policy.

Some HO-3 policies include a small amount of Ordinance or Law Coverage by default—usually 10% of your dwelling limit. That means if your Coverage A is $300,000, you might automatically have $30,000 of Ordinance or Law protection.

But many policies exclude it entirely unless you add it as an endorsement. Others may allow you to increase the limit to 25% or even 50% for an additional premium.

At Hoppy Insurance Agency, we always check whether it’s included, and if not, we help you decide whether an increase makes sense based on your home’s age, size, and local code trends.

Who Needs This Coverage?

In short: Every homeowner.

But especially those who:

Own homes built before 2005
Live in areas with frequent code updates (like Chesterfield County)
Have historic homes or homes with unique construction features
Are underinsured or have limited dwelling coverage
Want to avoid delays or red tape during a rebuild

Many people assume rebuilding is just a matter of replacing what’s lost. But code enforcement officials may hold you to much higher standards—especially after a major loss.

What Does It Cost to Add?

Ordinance or Law Coverage is usually one of the most affordable endorsements available. Depending on your carrier, home size, and chosen limit, it typically costs between $25 to $75 per year.

For that small cost, you’re protecting yourself against thousands—or tens of thousands—of dollars in mandatory rebuilding expenses.

We believe it’s one of the best values in home insurance.

Why It’s Especially Important in Chesterfield

Chesterfield County, like many localities in Virginia, continues to adopt updated building codes aligned with international and state standards. In recent years, we’ve seen updates related to:

Energy efficiency
Storm-resistance (especially for roofing and siding)
Electrical and fire safety
Accessibility requirements in certain rebuilds
Structural reinforcements in elevated homes or flood-prone areas

These changes may not affect you until a rebuild is required—but by then, it’s too late to add the coverage.

Final Thoughts

Most homeowners focus on what’s damaged. But in many cases, it’s what wasn’t damaged—and what must still be brought up to code—that creates the biggest out-of-pocket expense.

Ordinance or Law Coverage ensures that if your home is partially or totally destroyed, your insurance won’t just pay to rebuild what you had—it will help pay to rebuild what the law requires.

At Hoppy Insurance Agency, we review every home policy for this coverage. If it’s missing, we’ll explain how to add it. If it’s included, we’ll help you decide whether the limit is enough.

Don’t wait for a claim to find out what your policy doesn’t cover.

Let us help you fill the gaps—before you need to use your insurance.