The IEBC 25% Rule: What Roofers Need to Know About Ordinance & Law Coverage

There's a provision in the International Existing Building Code that most roofing contractors have never heard of — but it directly impacts how much they can collect on insurance restoration jobs. It's called the 25% rule, and understanding it can change how you approach every supplement.

What the 25% rule actually says

The International Existing Building Code (IEBC) Section 705.1 (2021 edition) and Section 706.1 (2024 edition) contains this language: when more than 25% of the roof covering of any building is removed and replaced within a 12-month period, the entire roof covering must conform to the requirements for new roofing.

In plain terms — if you're replacing more than a quarter of the roof, the whole thing has to meet current building code. Not the code from when the roof was originally installed. Current code.

Why this matters for insurance claims

On a typical hail or wind damage claim where the insurance company approves a full reroof, the 25% threshold is obviously met — you're at 100% replacement. But here's what most contractors miss: the insurance estimate usually prices the reroof based on matching what was there before. Same materials, same specs, same installation methods.

The problem is that building codes have changed. The roof that was installed ten or fifteen years ago was built to the code of that era. Current IRC requirements may call for different underlayment specifications, drip edge where none previously existed, updated ventilation ratios, or enhanced deck attachment methods. These aren't optional upgrades — under the IEBC, they're code requirements triggered by the scope of work.

This is where Ordinance & Law coverage comes in

Most homeowner insurance policies include Ordinance & Law coverage, broken into three parts. Coverage A handles demolition of the undamaged portion. Coverage B — Increased Cost of Construction — pays for the additional cost of bringing the structure up to current code. Coverage C covers demolition costs.

Coverage B is the key for roofers. When the IEBC 25% rule triggers a requirement to meet current code, and current code requires items or specifications beyond what was originally installed, the additional cost is covered under Coverage B. This is a separate coverage from the base dwelling claim (Coverage A), which means separate policy limits and potentially more total payout.

What items qualify as code upgrades

The items that commonly fall under O&L coverage are ones where current code differs from what the existing roof had. These vary by jurisdiction and by the age of the original roof, but common examples include underlayment upgrades where current code may require synthetic underlayment but the original roof had organic felt, drip edge installation where current IRC requires it but the existing roof had none, ventilation improvements to meet current airflow ratios, and deck attachment upgrades if the original sheathing doesn't meet current nailing or thickness requirements.

These are items that many contractors already include in their supplements — but they frame them as general recommendations rather than code-mandated upgrades payable under O&L. The framing matters. An adjuster can deny a "recommended" upgrade. It's harder to deny a code-required item backed by a specific IEBC citation and payable under a specific coverage provision the homeowner is already paying for.

This isn't just a Texas thing

The IEBC is published by the International Code Council and has been adopted by virtually every major municipality in the United States. Dallas has it. San Antonio has it. Houston, Austin, Phoenix, Denver, Atlanta, Chicago — nearly everywhere. The 25% rule isn't a local quirk. It's a national code provision.

The enforcement varies by jurisdiction. Some building departments actively enforce the current-code requirement on every reroof permit. Others are more lenient. But the code is on the books, and insurance policies with O&L coverage are designed to pay for exactly this scenario.

How to use this on your next job

First, determine the replacement scope. If the insurance estimate covers a full reroof, you're well above 25%. Even a partial repair covering just a few slopes may exceed the threshold depending on the total roof area.

Second, check the homeowner's policy for Ordinance & Law coverage. Most policies include it, but limits vary. Some policies cap O&L at 10% or 25% of the dwelling coverage amount.

Third, identify which items on your supplement are code-upgrade items — items required by current code but not present on or matching the existing roof. Frame these items in your supplement under O&L Coverage B, citing the specific IEBC section and the applicable IRC requirement.

Fourth, document everything. The adjuster needs to see that the code requirement exists, that the existing roof doesn't meet it, and that the 25% threshold has been met. Building code citations, manufacturer specs that exceed the old installation, and photos of existing conditions all support the claim.

The 25% rule isn't obscure legal theory. It's a straightforward code provision that creates a legitimate, well-documented path to additional payment on virtually every full reroof. The contractors who know about it collect more. The ones who don't are leaving O&L money on the table.