How this is calculated

Ordinance or Law Gap

Estimates the cost of bringing a rebuild up to current code from the home's construction era and the extent of damage, then subtracts the ordinance-or-law sub-limit your policy carries to illustrate what would sit outside it.

Step by step

Construction era sets a code-uplift share: built before 1980 is 25% of rebuild cost, 1980–1999 is 15%, 2000 or later is 8%.
The damage scenario sets how much of the structure is in play — about 30% for a partial loss, 60% for a major loss, 100% for a total loss.
If damage reaches the 50% substantial-damage threshold, the whole structure is treated as needing to meet code rather than just the damaged portion.
Illustrated code cost = dwelling limit × portion that must comply × the era's code-uplift share.
Ordinance-or-law coverage = dwelling limit × the percentage your policy carries; "I don't know" is illustrated at the common 10% built-in.
The gap is the code cost minus that coverage, never below zero.

The formula

Code cost = Coverage A × compliance portion × era uplift %. Gap = max(0, code cost − (Coverage A × ordinance-or-law %)).

Assumptions and their default values

Some of these change with the state you select.

Code-uplift share — built before 1980 25%

Code-uplift share — built 1980–1999 15%

Code-uplift share — built 2000 or later 8%

Substantial-damage threshold 50%

Partial-loss scenario 30%

Major-loss scenario 60%

What this method does not show

Nothing about the method is hidden. What it cannot know is your local jurisdiction's actual substantial-damage rule and code requirements, which are the two things that decide the real figure.

Important disclosures

This tool is educational only. It illustrates potential exposure using the assumptions shown — it is not insurance advice, a price, or an offer of coverage, and it does not determine whether any coverage amount is right for you. Policy language varies; review your actual policy and discuss your situation with a licensed insurance professional.
Building codes and substantial-damage rules are set locally and vary widely. Whether a rebuild must bring the whole structure to current code depends on your jurisdiction, not on this illustration.
The share of rebuild cost attributable to code uplift is a broad illustrative assumption by construction era. Real figures depend on what has changed locally since the home was built and what work the loss actually touches.
Ordinance-or-law coverage varies in structure as well as amount: some forms cover only the undamaged portion, some include demolition and debris removal separately, and some exclude certain code categories entirely.

Now that you can see the method, the numbers are worth a conversation.

Back to Ordinance or Law Gap