Insurance
Home Insurance Coverage Calculator
Home insurance pays to rebuild, not to replace what you paid. Those are different numbers, and construction costs have moved faster than most policies were updated. Fall below the co-insurance threshold and even a small claim gets reduced in proportion.
Tested against worked examplesHow we verify
Square feet of finished living space.
Ask a local builder or your agent — this is not the price per square foot homes sell for.
Usually set as a percentage of dwelling coverage.
Pays to live elsewhere while the home is rebuilt.
Common for wind, hail and hurricane. Applies to dwelling coverage, not the claim.
Insure below this share of rebuild cost and claims are reduced proportionally.
Coverage meets estimated rebuild cost: $0
Coverage meets estimated rebuild cost
$0
Your dwelling coverage covers the estimated cost to rebuild.
Rebuild cost is not market value. It excludes land, which is often a large share of what you paid, and includes demolition and current building codes, which market value does not. Ask your insurer for a replacement cost estimate rather than assuming.
- Estimated rebuild cost
- $400,000
- Your dwelling coverage
- $400,000
- Co-insurance floor
- $320,000
- Payout on a total loss
- $400,000
- Personal property coverage
- $200,000
- Loss of use coverage
- $80,000
- Deductible that would apply
- $2,500
- You pay on this claim
- $2,500
Not the market value, and not what you paid.
Insure below this and claims are cut proportionally.
Compare scenariosTry three values of one input
| Home size | |||
|---|---|---|---|
| Coverage meets estimated rebuild cost | $0 | $0 | $40,000+$40,000 |
| Estimated rebuild cost | $360,000 | $400,000+$40,000 | $440,000+$80,000 |
| Co-insurance floor | $288,000 | $320,000+$32,000 | $352,000+$64,000 |
| Payout on a total loss | $360,000 | $400,000+$40,000 | $400,000+$40,000 |
Every other input stays at the value you set above — currently 2,000 for home size. Differences are measured against the first column.
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How this calculator works
Rebuild cost is square footage × local cost per square foot. The co-insurance floor is that figure × the requirement, usually 80%. When coverage falls below the floor, claims are multiplied by coverage ÷ floor before the deductible is applied — the standard proportional penalty. The effective deductible is the greater of the flat amount and the percentage applied to dwelling coverage.
Cost per square foot is a rough regional average that varies with finish level, terrain, and local code requirements — a professional replacement cost estimate is more reliable. Ordinance and law coverage, extended replacement cost endorsements, scheduled personal property, and the actual cash value versus replacement cost distinction on contents are not modelled. Flood and earthquake are excluded, as they are from the policy itself.
What this assumes
- Dwelling coverage should reflect rebuild cost, not market value or purchase price — they differ, sometimes substantially.
- Standard policies exclude flood and earthquake entirely; both require separate cover.
- Replacement cost versus actual cash value is not distinguished here, and the difference is large on an older roof.
What changes this number
- Rebuild cost
- The correct basis for the dwelling limit. Insuring to market value can leave you underinsured after a total loss.
- Deductible
- Raising it lowers the premium meaningfully, and is only sensible if the deductible sits in savings.
- Claim history
- Affects future premiums, which is why small claims can cost more over several renewals than paying them yourself.
A worked example
Take the 2,000 sq ft insured to rebuild scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Home size
- 2,000
- Local rebuild cost per square foot
- $200
- Your dwelling coverage (Coverage A)
- $400,000
What it returns
- Coverage meets estimated rebuild cost
- $0
- Estimated rebuild cost
- $400,000
- Your dwelling coverage
- $400,000
- Co-insurance floor
- $320,000
- Payout on a total loss
- $400,000
Rebuild cost is not market value. It excludes land, which is often a large share of what you paid, and includes demolition and current building codes, which market value does not. Ask your insurer for a replacement cost estimate rather than assuming.
Try an example
Frequently asked questions
How much dwelling coverage do I need?
Enough to rebuild the structure at today's local construction costs — typically area × cost per square foot for your region. It is unrelated to market value, which includes land and reflects location rather than materials and labour.
Why is rebuild cost different from market value?
Market value includes land and location; rebuild cost does not. A house in an expensive area may sell for far more than it costs to build, while an older home with detailed construction can cost more to rebuild than it would sell for. Insuring to market value gets one of those badly wrong.
What is a co-insurance clause?
A requirement to insure at least a set share of rebuild cost, usually 80%. Fall below it and every claim is reduced in the same proportion as the shortfall. Insure a $500,000 rebuild for $300,000 against an 80% requirement and claims pay at 75 cents on the dollar, before the deductible.
How does a percentage deductible work?
It is a share of dwelling coverage, not of the claim. A 2% deductible on $400,000 of coverage is $8,000 regardless of whether the claim is $10,000 or $300,000. These are increasingly standard for wind, hail and hurricane in exposed regions, sitting alongside a lower flat deductible for everything else.
What is extended replacement cost?
An endorsement paying 10–50% above the dwelling limit if rebuild costs exceed it — valuable after a regional disaster, when demand spikes construction prices exactly when many claims arrive at once. It costs little and directly addresses the failure mode this calculator measures.
Does my policy cover flood or earthquake?
Almost certainly not. Standard homeowners policies exclude both. Flood coverage comes through the National Flood Insurance Program or private carriers; earthquake requires a separate policy or endorsement. This calculator does not model either, and neither does your policy unless you bought it.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.