Replacement Cost Value of the Building

The replacement cost of a building is the cost to replace a building with the same kind of material and construction without deduction for depreciation.

In most cases, a homeowner's agent will calculate the replacement cost using a cost estimator. This calculator uses construction data like time and labor costs and combines them with a home's specific characteristics like square footage, type of flooring, cabinets, heating and cooling systems, and roof type to put a replacement cost value on a home.

Replacement Cost Value is NOT:

1. The buildings's purchase price or the cost of any land with the property.

2. The market value of the building.

3. The amount of the mortgage loan.

Additional sources of Replacement Cost Value: Homeowner's policy, appraisal, or a contractor who specializes in replacement cost estimates may also provide this value.