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Reconstruction costs

Have you done a major renovation to your home lately? If so, this will likely affect the reconstruction costs associated with rebuilding your home and this is a recommended time for a conversation with your insurance professional. Remember to regularly review your home cover with an insurance professional is a good step towards maintaining an adequate level of insurance to rebuild your home, in the event of a claim.

So why do rebuilding costs differ from the market value of a home or even the cost of new construction? Rebuild costs can be affected by a number of factors, including but not limited to:

  • Economies of Scale – When houses are originally built, it is usually several houses built at the same time. This means that the materials and accessories needed for the constructions can be purchased by the contractor in a single transaction, and often at a wholesale price. Just as buying 50 or 100 tubs at once will cost less per unit than buying just one, you can also apply the same economic benefit to buying almost anything needed to build homes. in quantity. This can represent thousands of dollars in savings compared to single-detached home constructions.

  • Reverse Rebuild – New construction almost always follows the pattern of laying a foundation and building from there. When reconstruction is needed and you need to rebuild a house that is not a total loss, you must start by removing the roof and working from top to bottom. As this process is labor intensive and takes longer, it is also usually more expensive.

  • Site preparation – When a house is to be rebuilt, the site it stands on must be prepared before any new construction. This usually means additional costs for the demolition of any remaining (unusable) structure and the removal of the resulting debris. In the event of an intense fire, soil remediation may also be necessary. In new construction projects, site preparation is usually limited to clearing and grading costs.

  • Labor costs – Having tradespeople such as carpenters, bricklayers, drywallers, electricians, plumbers, roofers and painters on site for an extended period can help plan and use effectively. If a particular house is not ready for work requiring their specific expertise, they can probably be moved to work on a house that is. This flexibility in planning is usually not possible when working on a single house and has a huge impact on overall costs considering that labor is one of the most important components. reconstruction costs.

  • Accessibility – Rebuilding a destroyed home is often necessary in established neighborhoods with mature trees, lawns, landscaping, and fencing. These and other obstacles can limit access to the site and thus increase the cost of bringing necessary reconstruction materials to the site.

  • Older and Custom Homes – The rebuilding of older or custom homes should generally include the replacement of features and finishes that are considered unusual compared to more conventional homes. Whether rebuilding materials are rare due to their age or classified as “high-end”, they are expected to be more expensive to replace. Some examples of expensive home features to replace may include tile or slate roofs or floors; lath and plaster walls; paneling; ceilings covered with tin, with exposed beams or custom-made; solid wood doors; ornamental fireplaces; stained glass or stained glass; shaped stairs; and custom ironwork.

  • Updated Building Codes – In cases where homes are more than a few years old, it should be normal to expect building codes to have changed since the home was originally built. Meeting new codes may require rewiring, new plumbing, the use of safety glass, or the use of fireproof roofing materials.

  • Natural Disasters – If your home has been damaged or destroyed due to a natural disaster, it’s likely that other homes in your area also need to be repaired or rebuilt. In this case, it is not uncommon for material and labor costs to be higher due to shortages and increased demand for both.

  • Partial Damage – If your home was only damaged and not destroyed, the remaining structure should be protected from looting and the prospect of further damage. In usual cases, personal property should be stored offsite until the home can be repaired. To prevent further damage, plastic sheets are usually used to temporarily cover the remaining parts of the structure exposed to the elements.

  • Permits and Fees – Reconstruction may require permits, home inspection fees, and architectural/engineering fees.

  • Inflation – It’s no secret that material and labor costs continue to rise due to inflation. Depending on when the cost of rebuilding your home was originally estimated, it may cost more to complete the project today.

For the reasons described above, rebuilding costs can differ significantly from market value and the cost of new construction. Be well prepared in the event of a claim by regularly reviewing your coverage with an insurance professional. Remember that the suitability of your home insurance coverage depends on accurate information about the size, location, age, unusual features and finishes of your home, as well as details about any renovations or the additions. The more relevant information you disclose about your home, the more your coverage can protect you in the event of a claim.

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