Much of the housing stock in Hurst, Euless, Bedford, and the surrounding Mid-Cities was built decades ago, under building codes that have changed since. Ordinance or law coverage in a Texas home insurance policy is the endorsement that addresses the gap those changes create, and it is one of the easiest things to overlook on a declarations page.
The gap the standard form leaves
A basic home policy pays to repair or replace what was damaged, restoring it roughly to the condition it was in before the loss. It generally does not pay the extra cost of bringing the repaired structure up to the building code in force today. Texas consumer guidance lists “extra construction or repair costs to meet local building codes” among the endorsements companies commonly offer, which tells you the base policy is not handling this on its own [1].
The gap is wider than it first appears, because code requirements compound once work begins. Re-roofing a storm-damaged house can trigger current code requirements for decking, underlayment, and fastening patterns. A repair that touches the electrical panel or the foundation can open the same door. Each change costs money, and none of it is part of the pre-loss condition the base settlement is built around.
What an ordinance or law coverage endorsement buys
Ordinance or law coverage pays the increased cost of construction caused by the enforcement of an ordinance or law. Texas addressed this directly in 2001, when the state adopted mandatory endorsements to the Texas Homeowners and Dwelling policy forms amending the Building Laws exclusion. Those endorsements provide a set amount of coverage for the insured’s increased cost of construction at no additional premium, and they specify that the coverage is additional insurance that does not reduce the dwelling limit of liability [2].
The same action created optional endorsements that raise the limit above the included amount, expressed as percentages of the dwelling limit of liability, with additional premium due for the percentage selected [2]. Those percentage options are what you will see on a policy schedule today, and they vary by carrier. Treat any specific percentage as a carrier-specific figure rather than a fixed rule, since insurers have long since folded this 2001 language into their own forms and filings.
Why an older home sits in the riskiest spot
A hail claim on a newer home is mostly a re-roofing exercise. The same claim on a 1960s home can become a code-compliance project, and the difference comes out of the homeowner’s pocket when the endorsement is missing or its limit is too small. A $5,000 included amount, which is what the 2001 Texas endorsements provided, covers very little of a project that involves bringing a whole roof assembly or an electrical system up to current code [2].
Storm exposure is part of why this matters in North Texas. Home policies here commonly cover windstorm and hail damage, but the settlement is calculated against the damaged property as it existed, not as today’s code requires it to be rebuilt [1].
The question to ask before renewal
Find out when your home was built and when the major systems were last replaced. Then ask whether ordinance or law coverage is on the policy, what its limit is, and whether that limit is a percentage of the dwelling limit. If the answer is that the policy carries only the amount included in the base form, you have found the gap [2].
Ashford note: Coverage limits, percentage options, and availability vary by carrier and by policy form. The 2001 Texas bulletin establishes how this coverage was structured in the state’s forms, not a guarantee of what any individual carrier offers today. Ashford can compare the endorsement language and limits across multiple carriers, and nothing here changes what your own policy says.