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The Hidden Costs of Reconstructing Your Home After an Emergency

November 17, 2023
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Losing your home to a fire or severe weather is stressful enough. The last thing you should have to worry about is not having enough insurance to rebuild it or to be fully reimbursed, but such worries are becoming more common as replacement costs have skyrocketed.

So, why is it so expensive to replace a home these days? Consider these variables.

Location: The location of your home plays a significant role in reconstruction costs. Materials tend to cost more in expensive areas such as major cities and high-end neighborhoods.

Square Footage: The bigger your home, the more it will cost to replace.

Architectural Style and Quality: Homes with unique furnishings, intricate details, upgraded materials and custom designs often cost more to replace because they require specialized labor and materials.

Amenities and Upgrades: Items and upgrades such as swimming pools, designer kitchens and spa-style bathrooms will add to the cost of replacement. These luxuries are typically not standard in homebuilding.

Local Building Codes and Regulations: Each municipality has its own set of building codes, and adhering to those rules can be costly. Permits and inspections may also add to your cost.

Debris Removal and Clean up: Cleaning up after a catastrophic event can be very expensive, especially if it involves hazardous materials or asbestos. Even more so if a partial structure remains.

Labor and Materials: It’s the law of supply and demand. When the economy is good, people have more money to spend on construction, which causes prices to rise. Materials have also seen recent price increases due to supply chain breakdowns and tariffs on foreign goods.

Accessibility: The more difficult it is for construction crews and equipment to access your property; the higher prices go. A home built into a hill or steep slope will require special equipment to navigate the terrain.

Environmental Factors: Green building and energy efficient homes are more expensive to build, even if those moves save you money in the long run.

Consider these variables when purchasing homeowner’s insurance. And remember, market value is very different than replacement value. Market value considers location, demand and even the amount of time the home has been on the market. Replacement value is strictly what it will cost to rebuild your home with the above variables in mind.

The advisors at Oswald can help you determine the replacement value of your home, so you’re not blindsided or compromised in an emergency.


For more information, please contact us below or learn more on our Personal Risk page.

Erin Blevins
Direct line: 513-716-6001

Property & Casualty - Personal Risk | Cleveland
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