What's a reconstruction cost estimate?

If your home is destroyed by a fire or other catastrophe, will you be able to rebuild it?

You may not know that your home’s reconstruction cost is already set in your insurance policy. With construction prices trending upwards, it’s a good time to check your coverage limit and increase it if necessary. Otherwise, you’ll have to cover any gap from your own pocket.

Learn what a reconstruction cost estimate is and how to calculate it for your home.
 
What is a reconstruction cost estimate?

Your reconstruction cost estimate (also known as your dwelling coverage limit) is part of your homeowner’s insurance policy. It refers to the cost of rebuilding your home and any attached structures as they were before a total loss.

The most important thing to know about a reconstruction cost estimate is that it’s not the same as your house’s current market value.

How is it calculated?

The simplest way to determine your home’s reconstruction cost estimate is to look up the average per-foot rebuilding costs (labor and materials) where you live. Multiply that per-foot cost by the square footage of your home and any attached structures.

Reconstruction Cost Estimate vs. Home Appraisal
 
A home appraisal looks at the real estate market in your area and comparable properties to determine a sale price for your house based on its location, condition and other relevant factors.

In contrast, a reconstruction cost estimate is solely about the price of labor and materials. If you had to build your home from the ground up, to resemble its current condition, what would it cost?

It’s important to choose the right amount of dwelling coverage, or you could be left with out-of-pocket costs for the difference between your coverage limit and the actual reconstruction cost.

What’s the difference between a reconstruction cost and a replacement cost?

The replacement cost for your home refers only to the price of labor and materials. Reconstruction cost accounts for additional costs related to rebuilding such as demolition, debris removal, and more.

Have questions about your dwelling coverage limit? Just reach out, and we’ll be happy to help.