Reconstruction cost – or replacement cost – is the cost of hiring a contractor to replace your home as it is, using materials and design of the same or similar quality. This amount is not the same as market value, which is the value of comparable homes that have sold in your area. Your home’s current reconstruction cost could be very different from its market value.

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Remodeling and renovation projects can add significantly to the value of your home. Whether you do it yourself or hire a contractor, remember to update your homeowner insurance as you increase your home’s value.

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The cost to rebuild your home can vary greatly from the market value. Replacement value reflects a contractor’s bid to replace the materials and special features of your home. Because each home is different, it's important to have experts evaluate the cost to rebuild to help your agent ensure that you have proper coverage if you experience a minimal loss to your home or need to totally rebuild it.

Consider these important considerations:

  • Year Built – The average cost to rebuild a home constructed before 1945 can be roughly double the replacement cost of modern homes.
  • Architectural Style – There is a wide variety of architectural styles, including Tudor, Colonial, Georgian and Modern. Each style has unique features that maintain its authenticity and factor significantly in rebuilding costs.
  • Location – Obstacles to site accessibility in remote, urban and mountainous areas can increase labor costs, driving up total construction costs.
  • Shape – The footprint of the home can also significantly affect the replacement cost; multiple angles or curved walls require additional engineering.
Our loss control service is advisory only. We assume no responsibility for management or control of customer loss control activities or for implementation of recommended corrective measures. This content was gathered from trade services and public information and does not identify or address all possible exposures. We do not warrant that this information is consistent with the underwriting guidelines of The Cincinnati Insurance Company and its subsidiaries or with any federal, state or local law, regulation or ordinance.
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