reconstruction costs

Have you recently done a major renovation to your home? If so, it’s likely to affect the rebuilding costs associated with rebuilding your home and it’s a recommended time to talk to your insurance professional. Remembering to regularly check your home coverage with an insurance professional is a good step to maintain an adequate level of insurance to rebuild your home in the event of a disaster.

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

  • Economies of Scale – When houses are originally built, many houses are usually built at the same time. This means that materials and fixtures needed for the builds can be purchased by the contractor in a single transaction, and often at a bulk rate. Just as buying 50 or 100 bathtubs at a time costs less per unit than buying just one, you can apply the same economic benefit to buying almost everything else needed for home construction in bulk. This can add up to thousands of dollars in savings compared to building a single home.

  • Reverse Reconstruction – 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 should start by taking the roof off and working from top to bottom. Because this process is labor intensive and takes more time, it is also generally more expensive.

  • Site preparation – When a house is to be reconstructed, the site it sits on must be prepared before new construction can begin. This usually means additional costs for demolishing the remaining (unusable) structure and removing the resulting debris. Soil remediation may also be necessary in the event of a severe fire. In new construction projects, construction preparation is usually limited to brush removal and grading costs.

  • Labor costs – Having tradesmen such as carpenters, masons, drywallers, electricians, plumbers, roofers and painters all on site for an extended period of time can help with planning and efficient use. If a particular home isn’t ready for work that requires their specific expertise, they can likely be moved to work on a home. This flexibility in scheduling is not usually possible when working on a single home, and has a huge impact on the overall cost when you consider that labor is one of the largest components of the reconstruction cost.

  • Accessibility – Reconstruction of a destroyed home is often required in established neighborhoods with mature trees, lawns, landscaping, and fences. These and other obstacles can limit access to the construction site and therefore increase the cost of getting the necessary reconstruction materials to the construction site.

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

  • Updated Building Codes – In cases where houses are more than a few years old, it should be the normal expectation that building codes have changed since the house was originally built. Adhering to newer codes may require rewiring, new plumbing, using safety glass, or working with fire-retardant roofing materials.

  • Natural Disasters – If your home has been damaged or destroyed by a natural disaster, it is likely that other homes in your area will need to be similarly 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 house is only damaged and not destroyed, the remaining building must be protected from looting and the prospect of further damage. In common cases, personal belongings must be stored in a different location until the house can be repaired. To prevent further damage, plastic sheeting is usually used to temporarily cover parts of the remaining structure that are exposed to the elements.

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

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

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For the reasons outlined above, reconstruction costs can deviate significantly from the market value and cost of new construction. Be well prepared for disaster by regularly reviewing your coverage with an insurance professional. Remember, the adequacy of your home insurance coverage depends on accurate information about your home’s size, location, age, unusual features and finishes, as well as details of any renovations or additions. The more fully you disclose the pertinent information about your home, the more fully your coverage can protect you in the event of a disaster.