Navigating Code Upgrade Denials: A Roofer’s Guide

It’s a scenario every roofing contractor knows too well. You’ve inspected the roof, you’ve identified the damage, and you know exactly what the International Residential Code (IRC) requires to bring that home up to standard. You submit your estimate, confident in your expertise, only to get the adjuster’s report back. The result? A flat denial on the ice and water shield, the drip edge, or the decking upgrade.

They claim it’s “not covered” or “not damaged,” even though you know you cannot legally or ethically install a new roof without these components. This isn't just frustrating; it’s a direct hit to your bottom line and a liability trap waiting to spring. If you swallow the cost, you lose profit. If you ignore the code, you risk your license. Welcome to the murky world of Ordinance and Law coverage.

At Boss Up Solutions, we see this every day. The insurance game is designed to minimize payout, while your job is to maximize quality and compliance. The gap between those two goals is where code upgrade denials live. But here is the truth: most code denials aren't final. They are often a test of your documentation, your knowledge of policy limits, and your ability to articulate “technical necessity” without crossing the line into public adjusting.

This guide is your battle plan. We are going to break down exactly why these claims get denied, how to verify coverage before you even climb the ladder, and how to build a dossier so undeniable that the adjuster has no choice but to pay up. It’s time to stop leaving money on the table. It’s time to Boss Up.

What Is Ordinance and Law Coverage?

The Code Denial Trap: Why Adjusters Say 'No'

Why does an adjuster look at a citation from the 2018 or 2021 IRC and still say no? It usually comes down to three things: Policy Limits, Enforcement Evidence, or the "Incurred Cost" clause. Understanding the difference between what is required by law and what is covered by the policy is the first step in untangling this mess.

First, standard homeowners' policies (HO-3 forms) often exclude code upgrades in their base language. Unless the homeowner has purchased an Ordinance and Law endorsement, the carrier is technically only obligated to pay for "replacement cost"—which means putting back exactly what was there. If the old roof didn't have drip edge, they don't owe for drip edge, unless that specific endorsement kicks in. This puts the roofer in a bind: you must follow the law, but the check doesn't cover it.

Second, adjusters often hide behind the phrase "Enforced by Law." They will demand a letter from the local building department specifically stating that this specific property requires the upgrade. They know that many municipalities are understaffed and won't write custom letters for every roof claim. This is a delay tactic. If you don't have the right counter-evidence, the file closes, and you are left holding the bag.

Finally, there is the "Incurred Cost" trap. Many policies state they will not pay for code upgrades until the cost is actually incurred—meaning the work is done and the money is spent. They won't pay upfront. This creates a cash flow nightmare where the roofer has to front the cost of materials and labor, hoping the supplement gets approved later. Without a solid strategy, this can sink a project's profitability.

Step 1: The Pre-Inspection Audit (Verifying O&L Coverage)

Before you start arguing about International Residential Code (IRC) sections, you need to know if the money is even there. You cannot supplement for code upgrades if the policy strictly excludes them. This is where the "Pre-Inspection Audit" comes in. This isn't just about looking for damage; it's about looking for coverage.

Ask the homeowner for a copy of their declarations page. You are looking for "Ordinance or Law" coverage. It is typically typically capped at a percentage of the dwelling coverage (Coverage A)—usually 10%, 25%, or 50%. For example, if the home is insured for $300,000 and they have a 10% O&L endorsement, there is a maximum of $30,000 available specifically for code-related upgrades.

If this coverage exists, you have a green light to document every necessary upgrade. If it does not exist, you need to have a very difficult conversation with the homeowner immediately. You must explain that while the law requires you to install items like ice and water shield, their insurance policy does not pay for it. The homeowner will be responsible for these costs. having this conversation before construction begins builds trust. Having it after you send them a surprise invoice destroys it.

The 25% / 50% Rule and Partial Repairs

Another critical audit point is the state's matching or repair statutes. In many jurisdictions (like Florida's 25% rule), if more than a certain percentage of the roof is damaged or repaired, the entire roof must be brought up to current code. This is a massive leverage point. If you are repairing a slope and the local ordinance says "if more than 50% of the roof is repaired, the whole system must be replaced," you need to document that ordinance immediately. This moves the claim from a small repair to a full replacement, triggering the Ordinance and Law coverage.

Step 2: Building the 'Technical Necessity' Case

Once you've verified coverage, you need to build your argument. But be careful—this is where roofers get into trouble. You cannot argue policy interpretation; that is the Unauthorized Practice of Public Adjusting (UPPA). Instead, stay in your lane: the "Roofer's Lane." Your lane is Technical Necessity and Manufacturer Specifications.

Your argument should never be, "The policy owes this." Your argument should always be, "I cannot install this product according to manufacturer specifications (which are required by code) without this component." This subtle shift keeps you compliant and puts the pressure back on the technical requirements of the build.

Leverage the manufacturer's installation manual. Most shingle manufacturers explicitly state that their warranty is void if the roof isn't installed over a compliant deck or if proper ventilation isn't established. Since the building code (IRC R905.1) generally mandates that roof assemblies be installed in accordance with the manufacturer's instructions, the manufacturer's manual essentially becomes law. If the manual says "must have solid sheathing," and the roof has spaced plank decking with gaps wider than 1/4 inch, you have a code requirement to re-deck, driven by the manufacturer's specs.

Common Battlegrounds: Decking, Drip Edge, and Ventilation

Certain upgrades trigger denials more often than others. Knowing the specific code references for these common battlegrounds will speed up your supplement process significantly.

1. Drip Edge (IRC R905.2.8.5)

This is one of the most common fights. The IRC requires drip edge at eaves and gables of shingle roofs. Adjusters often say, "It wasn't there before, so we won't pay." Your response: Provide the municipality's adoption of the specific IRC year that mandates drip edge. Combine this with the manufacturer's requirement for starter strip and drip edge to achieve wind warranty ratings. Without it, the roof fails to meet the performance standard paid for in the policy.

2. Ice and Water Shield (IRC R905.1.2)

In regions with a history of ice damming, the code requires an ice barrier extending from the eave's edge to a point 24 inches inside the exterior wall line. Denials here often claim "it's not required by the local jurisdiction." You need the local climatic and geographic design criteria table (usually found in the local municipal code) that declares the area subject to ice damming. If the local table says "Yes" to ice damming, the code kicks in automatically.

3. Solid Decking vs. Spaced Sheathing

Older homes often have 1x6 or 1x8 planks with large gaps. Modern shingles require a "solidly sheathed deck." If you nail into a gap, the shingle will blow off. Adjusters will say, "Just sheet over the gaps." However, you must check the code regarding the added weight and the manufacturer's nailable surface requirements. If the gaps exceed manufacturer tolerances (usually 1/8 or 1/4 inch), re-decking is not an option; it is a necessity. Document the gap width with a tape measure in your photos.

The 'Incurred' Hurdle: Navigating 'Pay to Get Paid'

Perhaps the most frustrating aspect of Ordinance and Law coverage is the "Incurred Cost" provision. The carrier acknowledges the code upgrade is valid but refuses to release the funds until the work is complete and you provide an invoice showing the cost has been incurred. They want you to spend the money first.

This creates a cash flow gap. To navigate this, you need a strategy. Do not simply hope for the best. Be transparent with the homeowner. In some cases, you may need a "Code Upgrade Addendum" in your contract where the homeowner agrees to pay these specific costs if the insurance company delays payment, or assign the supplement proceeds directly to you.

Another tactic is to request a "Commitment Letter" from the adjuster. Ask them to confirm in writing: "If the contractor performs X, Y, and Z upgrades and provides an invoice for $5,000, will this be covered under the O&L endorsement?" Getting this commitment in writing before you order materials protects you from a post-work denial. It forces the adjuster to verify coverage eligibility without releasing the check immediately.

The Red Line: When to Refer a Public Adjuster

We cannot stress this enough: Know your limits. As a roofer, you are an expert in construction, repair, and code compliance. You are NOT licensed to interpret insurance policy language (unless you hold a PA license). Negotiating coverage, arguing about exclusions, or debating the meaning of "direct physical loss" puts you in danger of Unlicensed Practice of Public Adjusting (UPPA).

If an adjuster denies a code upgrade based on a complex policy exclusion—not a technical dispute—it is time to step back. If the dispute is about price and scope, you are generally safe. If the dispute is about policy coverage, stop. Refer the client to a reputable Public Adjuster or an insurance attorney. Boss Up Solutions supports this collaborative approach; sometimes the best way to get paid is to bring in the heavy artillery that carries a different license than yours.

Unique Value: The Code Upgrade Dossier

How do you win these battles consistently? By being more prepared than the adjuster. At Boss Up Solutions, we recommend creating a "Code Upgrade Dossier" for every municipality you work in. Do not scramble for proof on every single claim. Build a master file once and use it repeatedly.

Your Dossier should include:

• The Municipal Adoption Letter: A generic letter or printout from the city website stating which version of the IRC is currently enforced.
• Climate Charts: The local table showing wind speed requirements and ice damming history.
• Manufacturer Specs: PDFs of installation manuals for your preferred shingle, highlighting the sections on decking, ventilation, and underlayment.
• Code Snippets: Pre-highlighted text of IRC R905 and other relevant sections.

When you submit your initial estimate (ideally using Xact360 for precision), attach this dossier. You are essentially saying, "Here is the price, and here is the mountain of evidence proving why this price is non-negotiable." This preemptive strike often prevents the denial from happening in the first place because the adjuster sees you are not just guessing—you are a professional.

Key Takeaways for Roofers

Navigating code upgrade denials is not about luck; it is about leverage. Remember these core principles:

• Verify Coverage First: Check the Dec Page for Ordinance and Law endorsements before you promise upgrades.
• Argue Mechanics, Not Policy: Stick to manufacturer specs and safety requirements to avoid UPPA.
• Document the "Why": Don't just list a line item; attach the code snippet and manufacturer requirement that mandates it.
• Manage Cash Flow: secure commitment letters for incurred costs so you aren't financing the job blindly.
• Build Your Dossier: create a reusable evidence packet for your local markets.

Ready to Stop Leaving Money on the Table?

You shouldn't have to be a lawyer to get paid for doing your job correctly. If you are tired of fighting adjusters over drip edge and decking, it’s time to upgrade your back office. At Boss Up Solutions, we specialize in precise Xactimate estimates and supplementing strategies that get results. We handle the paperwork so you can handle the roof.

Who's Got Your Back? We Do.

Click here to learn more about our Xact360 and Supplement360 services today.