Why is replacement cost different from my home's market value?

Because market value includes land value and reflects what buyers will pay, while replacement cost is only what it would cost to rebuild the structure itself if it were destroyed. Market value can be higher or lower than actual construction cost, and replacement cost is what dwelling insurance coverage is meant to cover.

Why does under-insuring my home matter?

Many policies apply a coinsurance penalty if your dwelling coverage falls below a percentage (often 80%) of true replacement cost, reducing your claim payout proportionally even for a partial loss — keeping coverage current with rebuild costs (which rise with construction inflation) matters.

Should I update this every year?

Yes — construction material and labor costs change over time, and many insurers automatically adjust dwelling coverage for inflation, but it's worth periodically checking that your coverage still reflects a realistic rebuild cost, especially after a renovation.

Does this cover demolition, permits and rebuilding to current code?

No — it multiplies area by a rate and stops there. A total-loss rebuild also carries debris removal and demolition of what's left standing, design and permit fees, and the cost of meeting the building code in force today rather than the one the house was built to, which on an older house can be a large gap. In a US policy that last gap is what ordinance or law coverage addresses: the standard homeowners form already grants a limited amount of it, set as a percentage of the dwelling limit, and larger amounts are bought as an endorsement — so read what your own policy grants rather than assuming either extreme. Use this figure as a sanity check on a coverage number someone else produced, not as the number you insure to.

Is the rate still per square foot if I enter the area in square metres?

Yes, and that is the easiest way to get a wrong answer here. The area field follows the metric/imperial switch, but the rate field carries no unit of its own and is always read as dollars per square foot — the calculator converts your area to square feet first, then multiplies. So a rebuild rate quoted per square metre has to be divided by 10.764 before you type it; entered raw it returns a figure just under eleven times too high, or, if it exceeds the highest rate the field accepts, a notice when you leave the field saying the calculator has substituted that maximum for what you typed.

Why would a builder say a number like this comes out low?

Because rebuild cost is the thing floor area scales with worst. A complex roof, custom joinery, stone or plaster work and a site a delivery truck struggles to reach all add cost without adding a square foot, and a partial loss — which is most claims — usually runs higher per square foot than new construction, because undamaged work has to be cut back and the new work matched to what survived. Rates also climb when a whole area rebuilds at once after a storm or fire and the local trades are booked solid. The error runs the other way too: if you rolled an attached garage, unfinished basement or covered porch into the area, those rebuild for less per square foot than finished living space, and a single blended rate has just overpriced them.

Financial-Adjacent

Homeowners Insurance Replacement Cost Calculator

Get a rough estimate of your home's rebuild cost, a starting point for dwelling coverage amounts.

Answers as you typeNo submit button
Every formula citedNamed published standards
Calculated in your browserNo account, nothing uploaded

SettingsSettings for this calculationUS

Market

Imperial · sales tax

House Area

The total conditioned floor area of the home.

Use total finished square footage, not lot size.

Local Rebuild Cost per Sq Ft

The cost to rebuild from scratch in your area, per square foot.

This is often higher than market value per sq ft, since it reflects construction cost, not land value or market conditions. Check with a local contractor or your insurer's cost estimator tool for a more precise figure.

House area

1,600 sq ft

Low confidence

Figures that depend on a rate wait for yours — this page does not assume one.

Then change the inputs to see how far the answer moves.

Show calculation logic

How this was calculated

Formula source(s)

Replacement cost = conditioned floor area x local cost to rebuild per square foot

Inputs used

House Area: 1610 sq ft
Local Rebuild Cost per Sq Ft

Final result1,610 sq ft

What this calculation does not cover

This is a dwelling figure and not a policy. Personal property, detached structures — garage, shed, fence, pool, driveway — and the cost of living somewhere else while the house is rebuilt are separate coverages, generally written as a percentage of the dwelling limit rather than priced from anything on this page. Insuring to this number covers the shell and nothing that was inside it or standing beside it.
The dwelling limit this feeds also sets what you pay before the policy does. Wind, hail and hurricane deductibles are commonly written as a percentage of that limit rather than a flat sum, so a 2% deductible against a 400,000 limit is 8,000 out of pocket on a claim, and every increase in the limit raises that deductible with it.

Computed in your browser — nothing you enter is uploaded. Presented in US customary units and US trade terminology. Where a formula follows a published standard, that standard and its edition are cited beside it on this page; where none governs, the page says so. Local amendments override model codes — verify against the code in force where you build.

Sources checked 2026-09-06 · in the site-wide review of 2026-09-06 · v1.0.1

Regulatory standards & verification citations1

Replacement cost = conditioned floor area x local cost to rebuild per square foot

Cite this page

Your workspace

Most jobs need more than one number. Add the calculators you need next and they open right here, underneath this one — your figures stay on screen and nothing is lost to a page change.

Now that you have the number

These guides cover the work this quantity is for — the first ones run this calculator inside the section that raises the question.

Improvements That Come Back at Resaleuses this calculator
One budget, two quotes. Price both at the same figure to read the gap, then cost the reassessment and the sum insured that quietly follow the winner.
Insuring the Works and the Existing Structureuses this calculator
Two property risks share one wall. Who insures a half-built extension, who insures the house it is bolted to, and what a household policy does once the roof is open.
Costing a House From Plot to Keys

Still deciding? Rebuild Cost vs Market Value — the factors that actually differ, with no invented prices.

How to calculate homeowners insurance replacement cost in 3 steps

House AreaThe total conditioned floor area of the home.
Local Rebuild Cost per Sq FtThe cost to rebuild from scratch in your area, per square foot.
Estimated replacement costThe tool computes the estimated replacement cost from those figures and shows the formula, its sources, and a confidence rating alongside it.

Frequently asked questions

Why is replacement cost different from my home's market value?: Because market value includes land value and reflects what buyers will pay, while replacement cost is only what it would cost to rebuild the structure itself if it were destroyed. Market value can be higher or lower than actual construction cost, and replacement cost is what dwelling insurance coverage is meant to cover.
Why does under-insuring my home matter?: Many policies apply a coinsurance penalty if your dwelling coverage falls below a percentage (often 80%) of true replacement cost, reducing your claim payout proportionally even for a partial loss — keeping coverage current with rebuild costs (which rise with construction inflation) matters.
Should I update this every year?: Yes — construction material and labor costs change over time, and many insurers automatically adjust dwelling coverage for inflation, but it's worth periodically checking that your coverage still reflects a realistic rebuild cost, especially after a renovation.
Does this cover demolition, permits and rebuilding to current code?: No — it multiplies area by a rate and stops there. A total-loss rebuild also carries debris removal and demolition of what's left standing, design and permit fees, and the cost of meeting the building code in force today rather than the one the house was built to, which on an older house can be a large gap. In a US policy that last gap is what ordinance or law coverage addresses: the standard homeowners form already grants a limited amount of it, set as a percentage of the dwelling limit, and larger amounts are bought as an endorsement — so read what your own policy grants rather than assuming either extreme. Use this figure as a sanity check on a coverage number someone else produced, not as the number you insure to.
Is the rate still per square foot if I enter the area in square metres?: Yes, and that is the easiest way to get a wrong answer here. The area field follows the metric/imperial switch, but the rate field carries no unit of its own and is always read as dollars per square foot — the calculator converts your area to square feet first, then multiplies. So a rebuild rate quoted per square metre has to be divided by 10.764 before you type it; entered raw it returns a figure just under eleven times too high, or, if it exceeds the highest rate the field accepts, a notice when you leave the field saying the calculator has substituted that maximum for what you typed.
Why would a builder say a number like this comes out low?: Because rebuild cost is the thing floor area scales with worst. A complex roof, custom joinery, stone or plaster work and a site a delivery truck struggles to reach all add cost without adding a square foot, and a partial loss — which is most claims — usually runs higher per square foot than new construction, because undamaged work has to be cut back and the new work matched to what survived. Rates also climb when a whole area rebuilds at once after a storm or fire and the local trades are booked solid. The error runs the other way too: if you rolled an attached garage, unfinished basement or covered porch into the area, those rebuild for less per square foot than finished living space, and a single blended rate has just overpriced them.

Preliminary estimate, not certified engineering. This tool produces an indicative quantity calculation for planning purposes only — it is not a certified structural analysis, a guaranteed material takeoff, or a substitute for building department approval. Always verify measurements on-site and have a licensed contractor or structural engineer review any load-bearing, code-sensitive, or safety-critical work before purchasing materials or starting construction. Spotted an arithmetic or standards error? Report it to contact@craftquantities.com with your inputs — a confirmed fix gets a permanent check of its own, so the same mistake cannot come back.