New Construction vs. Reconsruction

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Wondering what to do after your claim?

No one really likes to think about the worst case scenario when it comes to insurance and claims. In this case, a lost house due to a fire or a natural disaster can cause a lot of grief and heart ache but that’s why you have good insurance right? So what happens when you go to repair your house or build new? What are the costs and benefits of doing one or the other? We have some helpful figures thanks to Hanover Insurance!

New Construction Cost


Reconstruction Cost

  • Most new construction is built by builders who mass-produce homes in a neighborhood with the costs of building materials pre-negotiated.
  • Cost-savings for mass produced homes can’t be applied in the reconstruction of a single existing home. It is very difficult to rebuild a single home at the original construction price.
  • Construction begins at the foundation and builds upward
  • Repairing a home that is not totally destroyed often means rebuilding from the top-down, which can be more expensive
  • Does not include debris removal
  • Includes debris removal
  • Pre-negotiated labor costs for mass production
  • Higher labor costs for single projects

The appropriate insurance coverage for a home is the actual cost to rebuild after a total loss; a number that can be significantly different than the purchase or construction price. Which is something to be aware of when you are putting in a claim, knowing this can save you from having any unpleasant surprises down the road.

Its important to keep your insurance up to date for occasions like this. Our claims department is ready in case of emergency, but the more you document and the more you are aware of what is covered by your insurance the easier the claims process will be. If you have any questions or concerns you can contact your Stolly Insurance Agent here in Lima at 419-227-2570.