# Reasonable house rebuilding cost for insurance?



## Four Pillars (Apr 5, 2009)

We're shopping around for new house insurance - my wife got a pretty cheap quote from Allstate, but the replacement value of the house is only for $216,000 which I'm pretty sure won't be anywhere near enough to rebuild the house.

However, I'm not too sure about house rebuilding costs - does anyone have an idea of costs? I know there are some contractors in here.

The house is about 1,300 square feet, detached 2 story with an unfinished basement. Let me know if there are other relevant details.

[edit - I live in Toronto]

I suspect they are using the low replacement cost so they can give out a low quote.


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## canadianbanks (Jun 5, 2009)

Four Pillars said:


> We're shopping around for new house insurance - my wife got a pretty cheap quote from Allstate, but the replacement value of the house is only for $216,000 which I'm pretty sure won't be anywhere near enough to rebuild the house.
> 
> However, I'm not too sure about house rebuilding costs - does anyone have an idea of costs? I know there are some contractors in here.
> 
> ...


It depends on where the house is. In North Toronto this would cost $350-$400K for example.


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## Four Pillars (Apr 5, 2009)

canadianbanks said:


> It depends on where the house is. In North Toronto this would cost $350-$400K for example.


I'm in the Beaches/Danforth area close to downtown. Would that be different than north T.O.?


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## donald (Apr 18, 2011)

I don't know what per sq costs are in toronto(guessing t.o and van are easily the highest in canada/north america even)but in winnipeg you are looking at "retail" not builder price around 220.00 sq finished with quality finishes ie:granite,above average fixtures,finish carpentry details ect(not fully custom thou)so say 220x1300=286,000(that's very rough)id tack on @least 10 % if your in prime toronto.....It's pretty safe to say your under a lot.


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## OhGreatGuru (May 24, 2009)

I think the insurance companies use calculator programs for replacement costs, based on the size & description of the house and its location. Ask for quotes from other companies and see what they come up with. If there is a significant disparity, go back to Allstate and ask them how they arrived at their estimate.

Insurance companie don't like to "overinsure" too much, because of the risk of paying out more than the property is worth.


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## Four Pillars (Apr 5, 2009)

Thanks for the responses everyone.

I think maybe we will shoot for $400k and see what the insurance company says. I think it should be at least $350k.

@OhGreatGuru - It's my assumption that the insurance coverage figure is the maximum amount they will pay. So even if you are overinsured, they still won't pay out more than what the house replacement actually costs.

However, I will ask the insurance company about that. Good point.


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## CanadianCapitalist (Mar 31, 2009)

FYI, we like in a similar size house here in Ottawa with finished basement. The building insurance we have is for $312,000.


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## jamesbe (May 8, 2010)

Remember there is no foundation to pour which is a large chunk of the costs and landscaping etc would not be covered. But sounds a bit low perhaps, depending on the finishings.


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## Four Pillars (Apr 5, 2009)

jamesbe said:


> Remember there is no foundation to pour which is a large chunk of the costs and landscaping etc would not be covered. But sounds a bit low perhaps, depending on the finishings.


So if a house burns down, they can reuse the foundation? I guess that makes sense and would certainly lower the cost.


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## jamesbe (May 8, 2010)

Depends on the foundation and the extent of the damage I suppose.


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## Spudd (Oct 11, 2011)

TD insurance offer the "million dollar solution" which means they cover you up to a million bucks (but of course only pay the actual costs involved, not the full million). For us they wound up being cheaper than Allstate and I find the million dollars comforting. We have a smallish bungalow so there's no way it would be anywhere near that to rebuild.


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## Four Pillars (Apr 5, 2009)

Spudd said:


> TD insurance offer the "million dollar solution" which means they cover you up to a million bucks (but of course only pay the actual costs involved, not the full million). For us they wound up being cheaper than Allstate and I find the million dollars comforting. We have a smallish bungalow so there's no way it would be anywhere near that to rebuild.


That's what we have now. However, they aren't renewing because of our garage apparently isn't up to their high standards.


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## Rusty O'Toole (Feb 1, 2012)

They are counting the replacement cost of building a new house not the value of the lot. Call some builders and ask what they charge per sq ft or how much to build a house like yours.


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## Four Pillars (Apr 5, 2009)

Rusty O'Toole said:


> They are counting the replacement cost of building a new house not the value of the lot. Call some builders and ask what they charge per sq ft or how much to build a house like yours.


Yes, I realize my lot isn't likely to burn down.

One of my neighbours is a contractor, so I plan to ask him.


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