Home Value Vs. My H.O. Policy 

Some questions just need to be asked ahead of time. In a worst-case-scenario, fire burns down the house, how much would it cost to rebuild it? The answer could surprise you. 

Let’s dive in. 

Numbers Need to Add Up

For some reason, if you have a homeowners policy where the house isn’t insured to the full replacement cost, than you might be in a bad situation in the event of a covered loss. In a covered loss situation where you are in fact insured to the fullest capacity, the event will likely feel like a more minor setback than a major catastrophe. 

I Need A Contractor or A Real Estate Agent…

Ever go onto Zillow to stalk what your neighbor’s home is worth? Us too. In this scenario, we want to look at what rebuilding costs would be *today* not necessarily when you bought the home. This will allow for us to take into consideration inflation rates in the ever-changing real estate market. We will also want to take factors like labor, materials, the going rate for a contractor and so forth into consideration too. 

Some key factors that affect the cost of rebuilding a home:

  • Total living area (in square footage)
  • Style of home (e.g., ranch, contemporary, colonial)
  • Construction type (e.g., frame or brick) 
  • Number of kitchens and bathrooms 
  • Quality of custom materials
  • Garage type (e.g., attached, detached, built-in)
  • Special features (e.g., fireplaces, porches, skylights)
  • Additions or enhancements (e.g., finished basements or in-law apartments)

Home Improvement

It’s important to have a current estimate for your home’s replacement cost, one that reflects any significant improvements that you have made to the house. For example, if you installed a central air conditioner or finished your basement after you took out your insurance policy and never updated the replacement cost, your home might not be fully covered in the event that you need to completely rebuild following a covered loss.


In conclusion, here are some small actions that you can take:

  • Talk to your agent or insurance representative about the dwelling coverage on your homeowners insurance policy.
  • Check in on your home’s replacement cost yearly, especially after making improvements to your home. Remember, even small improvements can affect the cost to rebuild your home. 

Making sure that your home is insured to its full estimated replacement cost is another way to help protect your home and the things you’ve worked hard to build.


Get a free homeowners insurance quote!

J. M. Whitney Insurance is an independent insurance agency located in Watertown, Massachusetts. Give us a call, stop by, or request a quote online to find out how much we can save you on your insurance.

If you liked this blog, stay tuned for more from J.M. Whitney Insurance!