Understanding the cost to rebuild your home

Your home is one of your most valuable assets. Make sure you have enough dwelling coverage on your homeowners insurance policy to rebuild it to its original state if it's destroyed by fire or other covered cause of loss. And while the current market value of your home may be lower than you'd like, the cost to rebuild may be higher than you think.

Cost to rebuild

The cost to rebuild your home is based on a number of factors and can often be higher than the potential selling price of your home. That's because the price of building materials may have increased over the past few years while the value of real estate has generally decreased.

Key factors that impact the cost to rebuild your home include:

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

Why rebuild costs can differ

Costs to rebuild your home often differ from home market values, mortgage requirements, tax assessments and real estate appraisals. This is due to a number of factors:

  • Costs for many raw materials that are needed to make repairs or to rebuild have increased in recent years, in some cases very significantly.
  • Specialized workers are often needed, in the event of a loss, to prevent further damage to your property.
  • Building codes may have changed since your home was built.

Make sure you have the right coverage

Updates, additions and improvements to your home may increase the amount of coverage you need. The most common changes that could increase the amount of coverage you need include: Installing hardwood floors, updating a kitchen or bath or adding a deck.

Here are some easy ways to keep your coverage current:

  • Review your coverage each year to be sure it reflects the cost to rebuild.
  • Inform your agent or Travelers representative of any home improvements or remodeling projects you've completed in the past year.
  • Consider that even small home improvements can affect the cost to rebuild your house.

Be confident in your insurance choices. Contact your agent or Travelers representative today. We'll work with you to develop a homeowners insurance policy that fits your needs and your budget.

The information on this site is general in nature. Any description of coverage is necessarily simplified. Whether a particular loss is covered depends on the specific facts and the provisions, exclusions and limits of the actual policy. Nothing on this site alters the terms or conditions of any of our policies. You should read the policy for a complete description of coverage. Coverage options, limits, discounts and deductibles are subject to availability and to individuals meeting our underwriting criteria. Not all features available in all areas.

Insurance is underwritten by The Travelers Indemnity Company and its property casualty affiliates, One Tower Square, Hartford, CT. For a complete list of personal insurance underwriting companies, click here.

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