A home Replacement Cost Estimator is a tool used by insurance companies to estimate the cost to rebuild your home in the event of a total loss. You will see this cost estimate on your insurance policy under Dwelling Coverage or Coverage A.

5 things to keep in mind about RCE’s:

1.  It’s an estimate

  • The estimate is based upon current building material costs, local labor costs, permits, etc.

2.  Why do home insurance companies use them?

  • It’s the most accurate way to determine the rebuild cost of your home.  This provides you an idea of how much Dwelling Coverage to purchase.

3.  A Home Appraisal is not the same as an RCE

  • Home Appraisal – determines the market value of your home and includes variables such as; recent property sales, the condition of the home, features, the land it’s on, neighborhood, etc.
  • RCE – determines the cost to replace the home (materials and labor only)

4.  Why is this important?

  • Ensures you have adequate insurance coverage should a total loss occur.
  • Prevents you from purchasing too much or too little Dwelling Coverage.

5.  How much should you insure your home for?

  • Insure your home for at least 100% of its estimated Replacement Cost.

If you have recently completed home improvements or renovations, make sure to notify your insurance agent to see if you need to make adjustments to your policy. If you have Prepared Insurance, you can find your agent on our website, or contact customer service at 877.313.1824 to locate your agent today.