Putting a damaged house back the way it was is one number. Putting it back the way the code says it has to be built now is a different, larger number. Most homeowners policies handle those two things in two separate places — the dwelling limit deals with the first, and a provision usually labeled ordinance or law coverage deals with the second. It’s frequently written as a percentage of the dwelling limit rather than a dollar figure, and the percentage is not the same on every policy.
Why there’s a gap at all
A house built in 1974 in Corinth was built to whatever was normal and legal in 1974. Wiring, insulation, header sizes, egress windows in a bedroom, the height of a deck rail, how a service panel is grounded — every one of those has moved since.
None of that matters while the house is standing. It matters when enough of it comes down that a contractor has to pull a permit and an inspector has to sign off, because at that point the rebuild follows today’s rules, not 1974’s. The extra cost of the difference is what ordinance or law coverage is aimed at. So is the cost of demolishing and hauling off the undamaged part of a structure a code official won’t let you keep, which is a line item people almost never see coming.
The local part
Northeast Mississippi’s housing stock skews old, and the numbers are specific. In Alcorn County, 48.0% of housing units — 7,814 of 16,283 — were built before 1980, and the median year built is 1981. Statewide the pre-1980 share is 41.5%. Tishomingo and Prentiss counties land within a point of Alcorn.
Here’s the honest wrinkle on top: “today’s code” is not one answer in Mississippi. Senate Bill 2378 in 2014 required counties and municipalities to adopt a uniform building code, but gave them until November 30, 2014 to opt out by resolution (Mississippi Insurance Department). Some did, some didn’t, and a house inside a city limit can face different requirements than one three miles out in the county. Whether a permit and an inspection are in your future after a big loss depends on where the house sits.
Where the variation lives
This is one of the more inconsistent corners of a homeowners policy, which is exactly why it’s worth finding in yours.
Some forms include a percentage of Coverage A automatically. Some include it only if an endorsement was added. Some let you buy a higher percentage. A few older forms exclude the increased cost of construction outright and say so plainly. Policies vary on this more than people expect, and two houses on the same street can be written two different ways.
The other thing worth knowing: ordinance or law provisions generally respond only when there’s a covered loss driving the rebuild. They aren’t a fund for voluntarily updating a house, and they aren’t triggered because a code changed. Something has to happen first.
The part that argues against us
On a house built in 2015, this is usually a minor line. The construction is already close to current requirements, the likely upgrade cost is small, and the standard percentage most forms carry is plenty. Plenty of people reading this could check the box, find 10%, and never think about it again.
It’s the 1970s and 1960s houses where the arithmetic changes — and in Alcorn County that’s about half of them.
What to look for when you read your own
Find the words “ordinance,” “law,” or “increased cost of construction” in the policy. Note whether it’s a percentage or a flat amount, and what it’s a percentage of. Check whether demolition and debris removal of undamaged portions is named. Then compare that to how old the house is and how much of it would have to be touched in a total loss.
If the answer isn’t obvious in ninety seconds of reading, it usually isn’t obvious to anybody. Bring the declarations page and the form to the Belmont office, or call or text 662-454-7831 and we’ll find the paragraph together. The home insurance page covers what else we look at on an older house.
This article is general information about how coverage typically works, not advice about your specific situation. Your policy is the contract, and it’s the only thing that says what you have. If you’d like someone to read it with you, that’s what we’re here for.
