How Do We Determine the Replacement Cost Estimate of Your Home or Investment Property?


When we insure your home we insure it for its “replacement cost estimate,” and I get asked all the time, “How did you come up with that amount?”   That’s a fair question, but before I answer it, I need to tell you that replacement cost is NOT:


  1. The market value of the home.replacement cost estimator
  2. The home’s purchase price or the cost of the land.
  3. The outstanding amount of any mortgage loan.


As we learned in the previous blog, replacement cost is: “the amount of money it would take to repair, replace or rebuild your home with materials similar to the kind and quality used in constructing your home.”


So how do we determine the replacement cost? It’s simple. L&M Insurance Group uses software packages provided by insurance companies that ask a series of specific questions about the structure. These questions include frame or block construction?   Slab or open foundation? What is the square footage? How many bedrooms/bathrooms? Is there a garage/carport, pool, etc. Once this information is all entered, the software gives us the replacement cost estimate.


If you want to determine your home’s replacement cost, here is a website you can use.


Call today (813-672-4100) or click this link to get a quote today on your home or investment property.

Larry Johnson brings over 23 years of experience writing insurance. He was the owner of Larry Johnson Insurance in Brandon for 13 years, and after selling his agency and taking some time off, he has joined L&M Insurance Group. Larry is excited to be back working with clients meeting their personal lines insurance needs. Call 813-672-4100 to get started

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