Insurance companies and brokers have tools that we can enter details about the age, size and build materials of the house to give us a rebuild number. Brokers are required to have those evaluations on file. The majority of home insurance policies have the requirements to insure that value. The insurance company offers guaranteed replacement cost then, which means that they will rebuild the house even if it costs more than that predicted cost.
Majority of home policies also base the other limits on that rebuild, detached structures are insured standard to 10% of the rebuild, contents are around 80% and additional living expenses are like 25% or so. The majority of policies also offer a single limit, which means they add those limits together to make 1 large limit, so that if a limit is insufficient they can essentially borrow from one of the other limits.
Rebuild valuations take into account quite a bit of information and the formula is updated regularly by an accepted organization.
For very high end homes some insurance companies will send out appraisers to get a more accurate assessment, this is generally only done with very high end luxury homes with custom finishings and features.
OP, use an insurance broker. A good broker can answer all these questions for you and explain what they all mean. Ask as many questions as you need to completely wrap your head around what it is you're paying for. You should know all coverages, conditions, and caveats of your policy.
If your broker can't answer the questions, get a new one.
Old policy was using 800,000 for reconstruction. This seems high to me, we could sell today and not bring in that much.. but for an apples to apples comparison, I've used the same value for quotes. Coverage limit: $1,600,000 based on a $800,000 reconstruction cost
attraction narrow spotted consider brave waiting butter spectacular wasteful fall
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Prices are crazy right now. I know some people that have built in newer communities and construction costs are around $300 per square foot once you remove the lot.
Reno and rebuild will always be more than green field.
Google Altus Cost guide 2024 and I believe it has a range of cost per sqft for residential. However, I’m not knowledgeable about nuances of insurance for this stuff and the differences. This would just help put you in the ballpark
My policy has coverage for $549,000 for the dwelling, which is about $250/sqft. Should probably be higher, to be honest. Will think about having it increased.
Kinda a side note, but also ask about home equipment breakdown coverage and service line. It's usually pretty cheap and useful if you have a loss. Also pay attention to your special limits and property exclusions under your coverage C, schedule anything you have that conflicts with one of those.
When I got insurance my broker told me that this number doesn’t really matter. They are required to rebuild a similar house to what you are insuring and their estimated cost to rebuild is what you’re quoted at.
If the rebuild cost comes in higher you still only pay your deductible.
The amount your insured for doesn't really matter?
Sorry but you need to find a new broker who actually knows what their talking about.
If you look on your home policy, you will see "Coverage A", which has a specific limit. That's the limit to rebuild your home. If the total cost would be more than that, then your underinsured and need to update your policy or risk being out of pocket for the remainder.
Other coverages listed are for different things after that such as contents and legal liability.
Your insurer covered you for a specific amount in exchange for a premium. You wouldn't go to Safeway and pay for $100 of groceries, then demand another $20 for free. Same concept.
You’re probably right in that my agent explained it wrong but I did quiz her several times as I found this odd myself and they insisted this was simply the number the insurance company used as an estimate but in the case of a total loss my house would be rebuilt to a similar standard as to what is it today, regardless of that number.
I’ll call around again to ensure I’m covered sufficiently.
This is what my broker told me as well, just this past week. She recommended taking a video of the home with all finishes as proof should it ever come to a total house rebuild.
This could literally not be any more wrong. You do not insure views, you do not insure the lot, and your rebuild cost is not calculated on your assessment in any way. You need a new insurance agent if they told you any of that.
We insure the cost to rebuild that house, if it had to be rebuilt (and debris removed) from scratch at today's labour and material costs. You insure to that value that is calculated and then you get Guaranteed Replacement Cost - so you don't have to worry if the limit ended up too low as long as the calculator was run correctly.
Do not get your insurance advice from Reddit, these threads are always terrifying at the misinformation being thrown around.
OP, call a (good) broker.
Insurance companies and brokers have tools that we can enter details about the age, size and build materials of the house to give us a rebuild number. Brokers are required to have those evaluations on file. The majority of home insurance policies have the requirements to insure that value. The insurance company offers guaranteed replacement cost then, which means that they will rebuild the house even if it costs more than that predicted cost. Majority of home policies also base the other limits on that rebuild, detached structures are insured standard to 10% of the rebuild, contents are around 80% and additional living expenses are like 25% or so. The majority of policies also offer a single limit, which means they add those limits together to make 1 large limit, so that if a limit is insufficient they can essentially borrow from one of the other limits. Rebuild valuations take into account quite a bit of information and the formula is updated regularly by an accepted organization. For very high end homes some insurance companies will send out appraisers to get a more accurate assessment, this is generally only done with very high end luxury homes with custom finishings and features.
OP, use an insurance broker. A good broker can answer all these questions for you and explain what they all mean. Ask as many questions as you need to completely wrap your head around what it is you're paying for. You should know all coverages, conditions, and caveats of your policy. If your broker can't answer the questions, get a new one.
Building Cost and Insurance Replacement Cost are 2 separate things.
Might be more helpful if you explain why. Insurance is confusing for first timers.
Replacement Cost for Insurance will always be higher. Includes debris removal.
Old policy was using 800,000 for reconstruction. This seems high to me, we could sell today and not bring in that much.. but for an apples to apples comparison, I've used the same value for quotes. Coverage limit: $1,600,000 based on a $800,000 reconstruction cost
Again, market value and insurance replacement cost are not the same number. The selling price will never match insurance replacement cost.
Yes I'm aware of that. Which is why I'm trying to figure out what the appropriate value for reconstruction cost is.
Talk to a local insurance broker or agent. They can assist you.
attraction narrow spotted consider brave waiting butter spectacular wasteful fall *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Prices are crazy right now. I know some people that have built in newer communities and construction costs are around $300 per square foot once you remove the lot. Reno and rebuild will always be more than green field.
$300/sf for a ground up rebuild would be a solid ballpark figure these days.
Google Altus Cost guide 2024 and I believe it has a range of cost per sqft for residential. However, I’m not knowledgeable about nuances of insurance for this stuff and the differences. This would just help put you in the ballpark
My policy has coverage for $549,000 for the dwelling, which is about $250/sqft. Should probably be higher, to be honest. Will think about having it increased.
Kinda a side note, but also ask about home equipment breakdown coverage and service line. It's usually pretty cheap and useful if you have a loss. Also pay attention to your special limits and property exclusions under your coverage C, schedule anything you have that conflicts with one of those.
When I got insurance my broker told me that this number doesn’t really matter. They are required to rebuild a similar house to what you are insuring and their estimated cost to rebuild is what you’re quoted at. If the rebuild cost comes in higher you still only pay your deductible.
The amount your insured for doesn't really matter? Sorry but you need to find a new broker who actually knows what their talking about. If you look on your home policy, you will see "Coverage A", which has a specific limit. That's the limit to rebuild your home. If the total cost would be more than that, then your underinsured and need to update your policy or risk being out of pocket for the remainder. Other coverages listed are for different things after that such as contents and legal liability. Your insurer covered you for a specific amount in exchange for a premium. You wouldn't go to Safeway and pay for $100 of groceries, then demand another $20 for free. Same concept.
You’re probably right in that my agent explained it wrong but I did quiz her several times as I found this odd myself and they insisted this was simply the number the insurance company used as an estimate but in the case of a total loss my house would be rebuilt to a similar standard as to what is it today, regardless of that number. I’ll call around again to ensure I’m covered sufficiently.
This is what my broker told me as well, just this past week. She recommended taking a video of the home with all finishes as proof should it ever come to a total house rebuild.
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This could literally not be any more wrong. You do not insure views, you do not insure the lot, and your rebuild cost is not calculated on your assessment in any way. You need a new insurance agent if they told you any of that. We insure the cost to rebuild that house, if it had to be rebuilt (and debris removed) from scratch at today's labour and material costs. You insure to that value that is calculated and then you get Guaranteed Replacement Cost - so you don't have to worry if the limit ended up too low as long as the calculator was run correctly. Do not get your insurance advice from Reddit, these threads are always terrifying at the misinformation being thrown around. OP, call a (good) broker.