If your house completely burned to the ground in a fire, how much would it cost to rebuild your home the way it stands today? Many homeowner insurance policies require the dwelling be insured at its replacement cost – the cost to rebuild your home using today’s labor and materials costs. If your home is not insured to its full replacement cost, your homeowner policy may not cover the full cost to rebuild in the event of a covered loss.

Replacement Cost vs. Market Value

Replacement cost represents the cost to rebuild the home taking into account the current labor rates and materials costs. This value can differ drastically from the home’s market value, or how much the home would sell for on the housing market. In an older home for instance, the replacement cost may be much greater than its market value. Materials present in these older homes such as plaster walls or gumwood trim that were common in the past are much more costly today. In some instances replacement cost could be as much as double or triple what the home will sell for.

Factors That Influence Replacement Cost

• Total living area (square footage)
• Construction of the home (brick, frame, concrete, etc.)
• # of kitchens and bathrooms
• Quality of materials used (builder’s grade, custom, etc.)
• Features of the home (fireplaces, finished basement, porches, central air conditioning, etc.)
• Garage type (dethatched, attached, etc.)

In order to make sure your home is insured properly, speak with your insurance agent about the replacement cost coverage on your homeowner insurance policy. Your insurance agent will have the knowledge and tools to help determine an accurate estimation for the cost to rebuild your home. Also, make sure to inform your agent anytime a major renovation or addition is performed at your house as this will affect the replacement cost.

Consolidated Agency in Rochester, NY, has helped residents find affordable and comprehensive home insurance since 1988. Their dedicated agents understand that no two homeowners are alike and will work to understand your unique needs before recommending coverage. Learn more about their services by visiting their website or Facebook page, and see the difference a local agent can make in keeping your home safe. To speak with a member of their staff, or to get a free insurance quote, call Consolidated Agency at (585) 467-4110