# Property Insurance Replacement Value Calculator

> Estimate a building’s rebuild (replacement) value for insurance from area and build cost, then check your sum insured against a coinsurance or average clause.

Category: Real estate · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/property-insurance-replacement-value-calculator

Buildings insurance should cover the cost to rebuild, not the market price. Rebuild cost is the floor area times a local build rate, plus demolition, professional fees and an allowance for cost inflation.

Also called: Rebuild cost calculator, Home insurance replacement cost calculator.

## Inputs
- Floor area (unit sq ft or m²; default 2000)
- Rebuild cost per unit area (default 150)
- Garage, outbuildings, walls and extras (default 20000; optional)
- Demolition and debris removal (unit %; default 5; optional)
- Professional fees and permits (unit %; default 10; optional)
- Building cost inflation (per year) (unit %; default 4; optional)
- Months of inflation to allow for (unit months; default 12; optional)
- Current sum insured (default 300000)
- Coinsurance / average requirement (unit % of replacement value; default 80)
- Example partial claim (default 100000; optional)
- Currency

## Results
- Estimated replacement value
- Building and extras
- Demolition and fees
- Inflation allowance
- Sum insured as % of replacement value
- Shortfall in cover
- Minimum cover to avoid a reduced payout
- Payout on the example claim

## Formula

```
Base = Area × Cost + Extras;  Replacement value = Base × (1 + Demolition% + Fees%) × (1 + Inflation)^(Months ÷ 12);  Required = Replacement value × Coinsurance%;  Payout = min(Claim, Cover, Claim × Cover ÷ Required) if Cover < Required, else min(Claim, Cover)
```

Where:
- Cover: the sum insured on your policy
- Coinsurance%: the share of replacement value you must insure to avoid a proportional cut

## Worked example
1. Base = 2,000 × 150 + 20,000 = $320,000.
2. Add 15% for demolition and fees = $368,000; add 4% inflation = $382,720.
3. 80% of 382,720 = $306,176 required; cover is $300,000.
4. Payout on a $100,000 claim = 100,000 × 300,000 ÷ 306,176 = $97,982.86.

**Result:** Rebuilding would cost about $382,720; with $300,000 of cover you are slightly below the 80% requirement, so a $100,000 claim pays $97,982.86.

## What the result means

Raise the sum insured to at least the replacement value if you can; anything below the coinsurance level cuts every partial claim, and anything below the full value leaves you short after a total loss.

## Assumptions and limits
- The rebuild rate, percentages and policy terms are your own figures.
- Allowances are a percentage of the building and extras cost.
- Not a professional rebuild valuation; listed, unusual or high-specification buildings can cost far more.
- Policy terms vary; some insurers use 100% average, some none, and contents cover is separate.

## Questions

### Why is rebuild cost different from market value?

Market value includes the land and location, which do not burn down. Rebuild cost can be lower or, for older or special buildings, much higher.

### What is the average or coinsurance clause?

If you insure for less than the required share of the replacement value, the insurer pays the same proportion of any claim. It stops people saving premium by underinsuring.

## Related calculators
- [Construction to Property Value Calculator](https://calculators.geekmidst.com/calculators/construction-to-property-value-calculator)
- [Inflation Calculator](https://calculators.geekmidst.com/calculators/inflation-calculator)
- [Concrete Calculator](https://calculators.geekmidst.com/calculators/concrete-calculator)
- [Percentage Calculator](https://calculators.geekmidst.com/calculators/percentage-calculator)

_This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ._

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/property-insurance-replacement-value-calculator