Home Insurance Replacement Cost Calculator
To set your homeowners insurance Coverage A (dwelling) limit correctly, you need to know your home's replacement cost, not its market value. Replacement cost is what it would cost to rebuild the structure from the ground up using comparable materials and quality at today's construction prices. Enter your home's square footage, the local cost per square foot to build, and the value of any detached structures. The calculator shows your recommended Coverage A limit and the minimum Coverage B (other structures) amount at the standard 10 percent ratio.
Replacement cost formula
Base Cost = Square Footage x Cost per Sq Ft x Quality Factor
Coverage A = Base Cost x (1 + Extended Buffer %)
Coverage B (minimum) = Coverage A x 10%
The quality factor adjusts for the finish level of your home. A custom home with granite countertops, hardwood floors, and high-end fixtures costs significantly more per square foot to rebuild than a standard builder-grade home.
What replacement cost covers
- Coverage A (Dwelling): The main structure including walls, roof, built-in appliances, and permanently attached fixtures.
- Coverage B (Other Structures): Detached garages, fences, sheds, guest houses, and swimming pool structures.
- Coverage C (Personal Property): Furniture, clothing, electronics. Usually 50 to 70% of Coverage A. Not calculated here as it depends on contents inventory.
- Coverage D (Loss of Use): Additional living expenses if your home becomes uninhabitable. Typically 20 to 30% of Coverage A.
Frequently asked questions
What is replacement cost coverage?
Replacement cost coverage pays what it costs to rebuild your home with materials of similar kind and quality at current prices, without any deduction for depreciation. It differs from actual cash value (ACV) coverage, which deducts depreciation and typically pays less.
Should I insure for market value or replacement cost?
Always insure for replacement cost, not market value. Market value includes land, which cannot burn down, and fluctuates with real estate conditions. Replacement cost is what your insurer would need to pay a contractor to rebuild the structure.
What is the average cost per square foot to rebuild a home?
The Marshall and Swift/Boeckh residential building cost index, referenced by the Insurance Information Institute, typically ranges from $100 to $400 per square foot depending on construction quality, region, and current material and labor costs. High-end custom homes can exceed $500 per square foot.
Does my home insurance cover detached structures?
Standard homeowners policies (HO-3 and HO-5 forms) include Coverage B for other structures, typically at 10 percent of your dwelling Coverage A limit. If your detached garage, fence, or guest house value exceeds that, you may need to increase Coverage B or add an endorsement.
What is an extended replacement cost endorsement?
An extended replacement cost endorsement increases your Coverage A payout by 20 to 50 percent above your stated limit if rebuilding costs exceed that limit due to unexpected cost inflation after a widespread disaster. The Insurance Information Institute recommends this endorsement as a buffer against construction cost spikes.
Official sources
- Insurance Information Institute: How Much Homeowners Insurance Do You Need?
- NAIC Consumer Guide: Homeowners Insurance Consumer Guide.
- HUD: Residential Structures Resources.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.