Why Reconstruction Costs More Than New Construction

By Acuity Insurance

(Photo by Getty Images)

If you’ve ever had to rebuild your home after a catastrophe, you probably know that reconstruction often costs more than new construction. If you haven’t experienced this, consider yourself lucky—but you should probably tune in anyway. There are many reasons repairs to your home could cost more than building something new. While we hope you never have to experience the stress of such an event, here are some of the reasons reconstruction can cost more.

  1. Material. Contractors often work on multiple homebuilding projects simultaneously, which allows builders to save on material costs by buying in bulk. When a home is undergoing reconstruction, the goal is often to get it back to what it was before. The detail involved and the lack of other projects can cause the cost of materials to be significantly more. In addition, upgrades may be necessary to comply with current building codes.

  2. Labor. Labor for home reconstruction can be more expensive due to the fact you can’t control when a loss will occur. If the work needs to be done during a busy time of year, you could see increased costs due to supply and demand. With older homes, the increase in labor costs may seem even more significant due to the change in wages from when the home was originally built.

  3. Site Preparation. Site preparation is also different when comparing new home construction to rebuilding. If there are parts of the home that can be saved, the contractor has to be sure not to cause more harm with their work. Also, debris needs to be cleared from the site before reconstruction can begin. In some cases, the damage to the home is too great, and it has to be demolished and completely rebuilt. Working around homeowner schedules and mature lots increases the complexity of the project as well.

While no two situations are exactly the same, these are just a few of the reasons reconstruction costs can be more than new construction. The best course of action is to make sure your home is protected with appropriate insurance limits!


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