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Replacement Cost Calculator
Insurance dwelling coverage should match rebuild cost — not market value or purchase price. This calculator estimates rebuild using square footage, construction quality, regional factor, and ancillary structures so you can match coverage correctly.
Replacement cost
$386,500
full rebuild
Build cost only
$346,500
All-in per sq ft
$184
80% coinsurance minimum
$309,200
avoid underinsurance penalty
How the math works
Replacement cost is what it takes to rebuild the structure from scratch — not the market value and not the purchase price. Standard residential construction runs $150–$200/sq ft as of 2025; custom and luxury scale up dramatically. HCOL metros add 30–100% to national averages.
Most policies carry an 80% coinsurance clause: if you insure for less than 80% of replacement cost, partial losses get prorated. Extended replacement cost endorsements (125–150%) protect against cost spikes after regional disasters.
How to Use
- Enter living-space square footage (above-grade, conditioned space only).
- Pick construction quality. Most tract-built homes fall in the standard tier.
- Apply a regional cost factor. National average is 1.0; California, HI, and parts of the Northeast run 1.3–1.8.
- Add extras (pool, detached garage, outbuildings).
- Add demolition and debris removal — rebuilding after a total loss requires site clearing first.
Frequently Asked Questions
Why not use market value?
Market value includes land, location premium, and school district desirability. Insurance rebuilds the structure — on the same lot you already own. Over-insuring the land is waste; under-insuring the structure triggers coinsurance penalties.
What's 80% coinsurance?
If your policy has an 80% coinsurance clause and you insure for less than 80% of replacement cost, partial losses get prorated. Example: rebuild cost $500k, coverage $300k (60%), a $100k kitchen fire pays only $75k (60% / 80%).
What's extended replacement cost?
An endorsement that pays 125%–150% of dwelling coverage if rebuild cost spikes (as after a hurricane or wildfire when labor and materials cost soars). Worth the small premium in disaster-prone regions.
How often should I update this?
Annually. Construction cost rose 40%+ from 2020–2023 and homeowners who didn't update coverage faced massive out-of-pocket gaps after losses. Re-estimate at each renewal.
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