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How do I estimate the replacement cost of my home? 

Determining the proper replacement cost also know as rebuild cost for your home is important to know as a homeowner. This is the amount your insurance company will pay up to replace or repair your dwelling. When purchasing your home, your insurer may calculate how much the replacement cost of your home will be.

Let’s proposes a scenario in which your home is completely destroyed by a fire. With the cost of materials and labour for your particular area/postal code, let’s say that your home costs $425,000 to rebuild. If your policy has a replacement cost of $375,000, that means you have experienced a shortfall of $50,000. Many would be surprised to know that a 2013 study by MSB indicates that 60% of homes are undervalued on their insurance policies by an average of 17%.


It is important to confirm what your insurance determines your replacement cost to be to make sure you will not experience this problem. I would suggests that you consult your city or municipality average cost of construction per square foot. You can do this by calling up a local contractor or construction company. If you are told that the average cost per square foot is $230 and you have a 1500 square foot home, the approximate rebuild plus any attached garage, basement finishes, pools, decks etc would be around $350,000. One should note that building prices are constantly inflating and fluctuating so one should be aware that a rebuild estimate is always an estimate. This can be particularly true in the event of rapid market/economic changes or during natural disasters.

For this reason, I would also recommend that extended or a guaranteed replacement endorsement be added to your policy in the event that the actual rebuild comes to more than the rebuild estimate. If you qualify for the guaranteed replacement cost endorsement at Tradition Mutual Insurance Company, we waive any depreciation and cover the cost of repairs or replacement (whichever is less) even if it is more than the amount of insurance for the dwelling on the policy.


​If you would like a free rebuild estimate of your home, click the link below to get your estimate or call Kyle Wijnands at 519-393-3246 today. He can also check to see if you are eligible for our guaranteed replacement cost coverage. 

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