- 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.
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