- Dwelling coverage (Coverage A)
- The part of a homeowners policy that pays to repair or rebuild the house itself and attached structures. It should equal what it would cost to rebuild, not what the home would sell for, because the land is not destroyed and market prices can be higher or lower than construction costs.
- Replacement cost
- The cost to rebuild the home with materials of like kind and quality at today's prices, without deducting for depreciation. Insurers estimate it from square footage, construction type, finishes and local labor costs. This calculator uses a simpler square-foot estimate.
- Insurance-to-value and the 80% rule
- Many homeowners policies only pay full replacement cost on a partial loss if the dwelling limit is at least 80% of the home's replacement cost. Below that, the insurer may pay a reduced amount. Insurance-to-value is your current limit divided by the recommended coverage.
- Other structures (Coverage B)
- Coverage for structures not attached to the house, such as a detached garage, shed, fence or guest house. It is usually set at 10% of Coverage A and can be raised if you have valuable outbuildings.
- Personal property (Coverage C)
- Coverage for furniture, clothing, electronics and other belongings. Policies pay either actual cash value or, with a replacement cost endorsement, the cost to buy new. Jewelry, firearms and collectibles have low theft limits unless scheduled separately.
- Loss of use (Coverage D)
- Pays additional living expenses — hotel or rent, extra food and travel costs — while your home cannot be lived in after a covered loss. Rebuilding after a major loss can take a year or more.
- Ordinance or law coverage
- Pays the extra cost of bringing a rebuilt home up to current building codes, such as new electrical, energy or wind standards, and of demolishing undamaged parts when the law requires it. Older homes often need more of this coverage.
- Extended replacement cost
- An endorsement that pays a set percentage above the dwelling limit, often 20% to 50%, if rebuilding costs more than expected — for example when labor and materials surge after a regional disaster. The cushion in this calculator plays a similar role.