How can I calculate the replacement cost of my home for insurance purposes?
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UPDATED: Aug 5, 2013
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Insurance Question from Fairfax Station, VA
Asked on 08/05/2013
How can I calculate the replacement cost of my home for insurance purposes? Is there a web site avaliable where I can obtain a rough estimate of the replacement cost of my home?
Answer given on August 14, 2013
There are a variety of ways to determine the replacement cost of your home. You can contact local contractors and ask what they would charge, per square foot, to rebuild your home. Make sure the estimate they give you is based on a one house build, and not if they were building a subdivision. One off building is more expensive than a group of homes.Another way is to contact your insurance company. Most insurance companies have formulas to determine rebuilding costs or they hire outside companies to determine replacement costs of homes. Some of the formulas used are on the low side of rebuilding costs, so if your insurance agent will give you a cost per square foot that they or the insurance company uses, ask for that. It is usually much more accurate a figure than the computer programs that many companies use.In any event, you should make sure your insurance company offers a replacement cost coverage that includes a percentage above the insured amount, in case the figures they are using are too low. This gives you extra protection in the event of a total loss.
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