Code-upgrade exclusions add $2,000+ when a covered repair triggers code compliance

When a home warranty approves replacement of a broken water heater or electrical panel, the new installation often must comply with current building codes that did not exist when the original was installed -- requiring new venting, seismic strapping, expansion tanks, or circuit upgrades. Warranty contracts universally exclude these 'code upgrade' costs, which add $1,500-$3,000 to what was supposed to be a covered repair. This persists because warranty companies wrote the exclusion into standard contracts decades ago, no state regulator requires them to cover code compliance, and the homeowner only discovers the exclusion when the contractor is already on-site and the old unit has been removed.