- Replacement cost is the total cost to rebuild your house from scratch reflecting today’s prices, construction methods and building codes.
- This figure can be higher than your home’s actual value.
- The replacement cost of your home can increase when a catastrophic event results in greater demand for labor and materials.
Replacement cost is the total cost to rebuild your home just as it stands today, taking into account current construction techniques, the price of labor and materials and the location of your home.
Replacement cost is not the same as your home’s market value. In fact, the cost to rebuild your home from scratch may be higher than what you could sell it for today. When determining replacement cost, your goal is to try and make sure you have sufficient coverage for all potential expenses associated with rebuilding.
The information contained in this page is provided for general informational purposes only. The information is provided by Farmers® and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.
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