The Cost of Rebuilding a Home vs. the Amount of Insurance:
A Misunderstood Concept

According to a CROP-Express omnibus survey , when consumers are asked “What would you base your decision on when establishing the amount of insurance for a home?” over half of respondents (55%) choose the wrong criterion. The correct answer is neither the price paid, nor the municipal evaluation nor the house’s market value; it is the evaluation of the cost of rebuilding the home. 

Some consumers may find that the amount of insurance they have is insufficient to rebuild their residence. You must go beyond appearances when evaluating the risks that could affect a residence. You must take into account all the improvements that have been done over the years, for instance, the addition of a deck, kitchen or bathroom renovations, adding an extra room or powder room in the basement, or new interior or exterior finishes. You must also take into consideration the original construction materials as opposed to those used today.

The best home evaluations are done by professional evaluators. Ideally, an insured should have an evaluation of the cost of rebuilding the home done every five years.

In fact, the Code of ethics of damage insurance representatives explains that while it is the responsibility of the representative to conscientiously advise his client with respect to both the evaluation of his property and the amount of insurance needed to provide the best coverage, he should also encourage the client to avail himself of the services of a professional evaluator.