How to Estimate Home Replacement Cost

Don't assume that your insurance will replace your home, especially if you haven't reviewed your policy in a few years. Labor and material costs increase every year, so you need to stay current; however, overbuying results in paying extra on your premiums.

It pays to know how much it would cost to rebuild your home.
  1. Measure the square footage of your home. You can go around the outside to measure length and width and then multiply by the number of floors.
  2. Note any architectural features that would be expensive to replace, such as ornate mantles, crown molding and expensive built-in cabinetry.
  3. Run these numbers through a database and calculator provided by an insurance company. You can work with an agent or find a tool on an insurance company's web site.
  4. As a comparison exercise, multiply the square footage by the average construction cost per square foot for your area. A local bank providing construction loans can give this to you.
  5. Compare the average costs to your home's size to determine if they are similar and support each other. If they are vastly different, you should try another insurance company's tool or perhaps get an estimate from a local contractor.

Things You Will Need

  • Measuring tape
  • Internet access


  • Remember that the replacement cost is not the same as the market value of your home. In a fire, you may lose some trees but you will keep the land beneath the house and won't need to replace that.
  • You can never purchase insurance for things of sentimental value, so take some steps to protect memories such as pictures. Now that memory is cheap, you can store a backup of your digital photos on a USB key, placing those extra copies in a safe deposit box or at a friend's house.
  • Take a photographic inventory of your items and store those away from your home to help you remember what you need to replace and to offer proof to the insurance company should your agent ask for it.
  • Your home town or city also has the square footage for your home on file for tax purposes.


  • Consider the other items you might lose if you need to replace your home. Valuable art, jewelry, collectibles or instruments can cost a significant amount of money to replace, so consider adding extra insurance for these items in case they are destroyed or stolen.

About the Author

Linda Zukauskas began writing in 1989. She is now a freelance writer for nonprofits and municipalities. Zukauskas is also a reporter for "Voices" newspaper. Her work has appeared in various online publications. She graduated from the University of Connecticut with a Bachelor of Arts degree in English.

Photo Credits

  • house blueprint and house model studio isolated image by dinostock from Fotolia.com