Insurance

Replacement Cost Estimator | Bankrate

It’s important to make sure your home insurance policy sufficiently covers your home, and you can start by understanding both home coverage and how your policy calculates replacement cost. Dwelling coverage is what would rebuild or repair your home due to a covered loss, and for this reason, it can be the most critical part of your home insurance policy.

But when it comes to determining how much homeowners coverage you need, you’ll also need to understand replacement cost. This is the cost associated with rebuilding your home, and it is usually imperative that you choose an amount of homeowners coverage that adequately insures your home.

Reading: How to calculate replacement cost of home for insurance

what is the replacement cost of a house?

The replacement cost of a home is the amount it would cost to rebuild your home using the same materials if there is damage or if you need a complete rebuild. This cost is a combination of many factors, including construction costs, the features of the home, the quality of the materials used to build the home, and the square footage. is the amount it would take to rebuild the house from top to bottom, as it was before it was damaged or destroyed.

See also: Homeowners Insurance NJ – New Jersey | Insurance.com

Another important thing to remember is that replacement cost is not equal to the market value of your home. Market value is determined by what your home could sell for under current market conditions. Market value also incorporates many other factors into the price, such as the value of the land, local amenities, and nearby schools.

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calculate the replacement cost of your home

Although calculating the replacement cost of your home may seem intimidating, there are many resources available to help you. A good place to start may be to request a quote from a local contractor or review your property inspection report.

You may also benefit from working directly with a licensed insurance agent. Local agents may be familiar with the area and have a better idea of ​​associated construction costs, but many insurance companies will also use a replacement cost estimator to calculate this amount. In general, the features of your home, listed below, will have the greatest impact on your home’s replacement cost:

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