Home Insurance Calculator
Rebuild Cost, Not Market Value
A common mistake in setting home insurance coverage is anchoring on the home's sale price. Insurers don't cover market value — they cover the cost to rebuild the structure from the ground up, which excludes land value entirely and can run higher or lower than what the home would sell for depending on local construction costs. This calculator works from square footage and local rebuild cost per square foot, the two inputs that actually determine dwelling coverage.
The Formula
Contents Coverage = Dwelling Coverage × Contents % (default 60%)
Contents coverage defaults to 60% of dwelling coverage, inside the 50–70% range insurers commonly use as a starting rule of thumb, though it should be adjusted up or down based on an actual inventory of belongings.
A Worked Example
| Square Footage | Rebuild Cost/Sqft | Dwelling Coverage | Contents Coverage | Total Coverage |
|---|---|---|---|---|
| 1,500 | $120 | $180,000 | $108,000 | $288,000 |
| 2,200 | $150 | $330,000 | $198,000 | $528,000 |
| 3,000 | $180 | $540,000 | $324,000 | $864,000 |
Where This Matters
- Avoiding a coinsurance penalty — most policies require dwelling coverage at or near full rebuild cost; underinsuring can trigger a coinsurance clause that reduces claim payouts even on partial losses.
- After a renovation — an addition, a kitchen remodel, or finished basement raises rebuild cost independent of market value, and coverage should be updated accordingly.
- Comparing quotes across insurers — if two insurers quote very different premiums for the same declared coverage, checking whether their rebuild cost assumptions per square foot differ often explains the gap.
How to Use This Calculator
- Enter your home's square footage.
- Enter the local rebuild cost per square foot for your area.
- Enter a contents coverage percentage, or leave blank to use the 60% default.
- Select Calculate to see dwelling coverage, contents coverage, and total coverage needed.
Related Calculations
Layer additional liability protection on top with the Umbrella Insurance Calculator, or check whether your current policy matches this target using the Coverage Calculator.