Home replacement cost estimator

Your dwelling limit is supposed to buy a new house, not repay what you paid for the old one. This estimator builds that figure from square footage and a local cost to build, then shows the extra costs a total loss adds on top.

How to use it

The one number the tool cannot know is the local cost to build per square foot, and it moves the answer more than anything else. Get it from a local builder, from your agent, or from the replacement cost estimate your insurer already ran for your policy (ask for the inputs it used, not just the total). Then enter:

• Finished living area in square feet, from the appraisal or the county record.
• Attached garage and finished basement areas, each with its own, lower, cost per square foot.
• Special features in dollars: custom cabinets, stone, high-end windows, built-ins, solar.
• The three percentages for demolition, code upgrades and a post-disaster price surge.
• Optionally, your current dwelling limit from the declarations page.

How the math works

The base is living area times its cost, plus garage area times its cost, plus basement area times its cost, plus special features. A surge percentage, if any, is added to the base to give Coverage A, which the tool rounds up to the next $1,000 as "dwelling coverage to carry." Demolition and code upgrades are each a percentage of that figure and are shown separately as the all-in cost of a total loss.

Say, hypothetically, a 2,000 square foot house at $200 a square foot ($400,000), a 400 square foot garage at $90 ($36,000), and no basement or extras. The base is $436,000. With the 5% demolition and 10% code assumptions, debris removal is $21,800 and code upgrades are $43,600, so a total loss would cost about $501,400. If your limit were $400,000, the tool would show you at 92% of the $436,000 rebuild cost and report you underinsured by about $36,000 for a total loss.

What it assumes

Every default is an example you replace: $200 and $90 a square foot, $80 for a basement, 2,000 and 400 square feet. None is market data, and construction costs differ sharply by region and finish level. The 5% and 10% add-ons are the tool's assumptions. They match the standard ISO homeowners form (HO 00 03 05 11, May 2011 edition), which makes an additional 5% of the limit available for debris removal once the limit is exhausted and lets you use up to 10% of Coverage A toward ordinance or law costs. A policy that provides less, or more, changes how much of the total-loss figure is actually insured. The 80% test the tool applies to your current limit is that form's replacement cost condition.

Where it stops being right

A square-foot estimate is a rough tool. It does not see your roof pitch, foundation type, plumbing, custom millwork or the age of your home, and older houses with plaster, original trim or a difficult site can cost far more to rebuild than a tract home of the same size. The surge field exists because labor and materials can jump after a widespread disaster; leave it at 0 for a normal year, and read about inflation, rebuilding costs and underinsurance if your area has seen a recent catastrophe. The tool also leaves out land, landscaping and your belongings. Market value is the wrong benchmark because it includes land and location, as replacement cost vs market value: why your home's price is the wrong number explains. A line-by-line estimate from your insurer or a contractor beats this one; use this tool to check that number, then ask about extended replacement cost.