Personal InsuranceCorporate Insurance
Print

Understanding The Cost To Rebuild Your Home

Cost to rebuild

Cost to rebuild (reconstruction cost) reflects estimated construction material, labor and equipment costs to rebuild your home while maintaining the same size and quality of construction, at today’s prices.

Key features that impact the cost to rebuild your home include:

  • Total living area (square footage of home)
  • Style of home (e.g. ranch, contemporary, colonial, etc.)
  • Exterior wall construction (e.g. frame, brick, etc.), materials and roofing
  • Number of kitchens and bathrooms and quality of materials
  • Garage type (e.g. attached, detached, built in)
  • Special features (e.g. fireplaces, porches, skylights, etc.)

Don’t rely on market value

The cost to rebuild often differs from what you paid for your home, or what you might pay for a similar home in your area. For this reason, market value is not used to determine the coverage amount needed. Market value can be affected by many factors, including:

  • Location of your home
  • Economic conditions
  • Value of the land

It’s important to know that rebuilds costs for insurance purposes can also differ from mortgage requirements, tax assessments, new construction costs and other appraisals of your home.

Why rebuild costs can differ

  • Building codes may have changed since your home was built
  • More specialized workers are needed to prevent further damage and to rebuild the home
  • Trees, shrubs and power lines can make it difficult for large equipment to access the property
  • Materials to restore your home may be more expensive or hard to find

Keep your coverage up-to-date

Updates, additions and improvements to your home may increase the amount of coverage you need. Most common changes like installing hardwood floors, updating a kitchen or bath, or adding a deck can affect the cost to rebuild.

Here are some ways to help keep your coverage and limits current:

  • Review your policy each year to be sure it reflects the cost to rebuild
  • Inform your agent of any home improvements
  • Consider that even small home improvements can affect the cost to rebuild your home