How to Calculate the Replacement Value of Your Home

The agents at Castillo & Associates Insurance in Tucson, AZ highly recommend that you use a replacement valuation for the coverage level of your home insurance. The reasons are obvious. If your home had a certain value in the past years, the value of the home may be about the same, but it may be more now. However, if you need to rebuild a home in the case of a major disaster that destroys everything, you will need to pay the current market prices for the reconstruction of the home.  

Every year it is a good idea to re-calculate the replacement value of your home to make sure you have adequate insurance coverage.

Here are the steps to take to get a new replacement valuation for your home:

  1. First of all, the most important step is to find out the square footage of the home and know how big each room is and what type of use the room has. You can start with any architectural or construction blueprints to give you a rough idea. Then you adjust for new spaces that have been created since the first plans were made. If these are not available then you need to measure each room, add some extra dimensions to allow for the outside walls and then you have a rough calculation for each room to work with.
  2.  After you have a rough plan design for your home that includes the actual measurements of the square footage you need to apply;y the current construction cost per square foot for new construction in your area.
  3. One way to find out how the averages are currently is to look at homes that are "comps," which are homes for sale in nearby areas and use the calculations they use for square footage. Then add a bit more because new construction is always higher than older construction.
  4. Be sure to add the cost of any special elements in the home to the reconstruction price. For example, if you have a handmade bookcase or a hand-carved marble fireplace mantle be sure to add the additional of these special items.
  5. Check with your agent at Castillo & Associates Insurance in Tucson, AZ for any questions about your home insurance, to get help with any replacement cost valuations and to make sure you have adequate coverage.