The paper says property prices are up 10%

Sorry mate, using that will lead you up the garden path

What is rebuilding cost?

As a homeowner you're used to thinking about your home in terms of different types of value. For insurance purposes, you should think about your home in terms of what it could cost to rebuild it.

What makes up the cost of rebuilding?

An estimated cost of rebuilding should take into account the likely cost of replacing your home on its current site based on its present size, standard and type of construction, together with any other structures such as decks, driveways, sheds, garages and fencing, retaining walls, Recreational Features and Special Features.

Building costs will comprise a significant portion of this amount, but it should also include the demolition and removal of debris, site preparation, professional fees and compliance costs – in other words everything that would need to happen if you were to rebuild your home. It's a good idea to also make some allowance for inflation as the price for many of these things can change, either during the year that your policy runs for, or during the repair or rebuilding process following your home being damaged The calculator on this site does not make an allowance for inflation, so you will need to add this to the figure provided if you use the calculator.

Here are the things you’ll need to know about your house

(Roll your cursor over the hot spots to learn more)

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Home’s age
Whether your home is a villa, bungalow, relatively new standard-designed home or a one-off architectural design, the cost of rebuilding it would differ from what it cost to build it originally.

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Standard of construction
A higher specification home will probably be more expensive to rebuild than another house that’s the same size but built more simply.

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Slope
The slope of the land your home is built on can affect how much it would cost to rebuild.

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Decking
This is usually covered in your home insurance policy so you should include it when estimating the likely cost of rebuilding your home.

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Recreational Features
Tennis courts, permanent swimming pools and permanent spa pools are automatically covered in some IAG-underwritten home policies up to a specified amount called a policy limit or cover limit. You can purchase additional cover if you decide you need more. If your IAG-underwritten home policy does not automatically cover these features and you want them covered, then cover will need to be purchased.

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Special Features
These are defined in IAG policies as bridges, culverts, permanent fords or dams, wharves, piers, landings or jetties, cable cars, and private utility plant including wind or water mills and diesel generators. They are not automatically covered by home policies underwritten by IAG so you’ll need to specify a separate Sum Insured amount for these if you’d like them covered.

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Retaining walls
Under home policies underwritten by IAG, cover for retaining walls is limited or not automatically provided. You can purchase cover or an additional level of cover over and above the policy limit or cover limit.

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Rooms
Kitchens and bathrooms are usually the most expensive rooms in your home to rebuild, so it pays to take some extra care with these rooms when working out what it could cost to rebuild them.

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Levels
Rebuilding a split-level or multi-storey home is often more expensive than rebuilding a single-level home.

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Floor area
The bigger your home the more it will cost to rebuild. When working out what it could cost to rebuild, don’t forget to take into account all the levels in your home.

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Floor Construction
Your floor may be constructed from a poured concrete pad, tongue & groove floorboards, particle board or plywood. The type of construction, along with any fixed floor covering, will affect what it could cost to rebuild your home.

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Roofing
Materials can include terracotta or concrete tiles, metal, tin or colour steel, fibre cement, shingles or slate. Any newly rebuilt home must also include insulation in the roof space.

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Exterior walls
These can be made of timber, brick, block, stone, mudbrick or modern cladding products such as EPS or artificial weatherboard. These all cost different amounts, and if you had to rebuild you’d need to allow for insulation in the wall too.

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Driveways
Sealed or paved driveways are covered under home policies underwritten by IAG but shingle or gravel driveways are not covered. In the calculator you can enter the width and length of your sealed or paved driveway to include it in your calculation.

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Garages and carports
These should be included when you estimate the likely cost of rebuilding your home.

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Windows
Today’s building code may require newly rebuilt and repaired homes to use double glazing. The calculator assumes double glazing will be required when estimating the likely cost of rebuilding.

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Fencing
When estimating the cost of rebuilding your home remember to include all your fencing, not just the fencing around your boundary, as well as your portion of any fencing you may share with your neighbours.

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Trees and other plants
Home policies underwritten by IAG do not cover these but may include an amount for landscaping in some situations. It’s best to check your Policy Wording for details.

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Water tanks
These are covered under your IAG home insurance policy and should be included when estimating the likely cost of rebuilding your home.

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Paving
Any permanently laid paving is covered by IAG-underwritten home policies so you should include it when estimating the likely cost of rebuilding your home. Shingle and pebble areas are not covered.

What about land value?

The cost of rebuilding doesn't include the value of your land, as home insurance policies don't cover land. The Earthquake Commission provides some cover for land in the event of damage due to natural disasters.

What about market value and rateable value?

Other types of home value aren't suitable for insurance purposes. Your home's market value represents the value of your whole property (including land) on the current real estate market. On the other hand, your home's rateable value (RV or GV) is used for rating purposes. Neither of these figures relate to what it could cost to rebuild your home.

Find out why the likely cost of rebuilding your home is different to your home's market value

Market value

The market value of your home reflects its likely value on the real estate market. In addition to the features, size, condition and quality of your home, it may include the land included in the title of your property, and improvements to the land itself such as landscaping and other features. It can also be influenced by factors that may not necessarily impact on the cost of rebuilding, such as location.

Rebuilding cost

An estimate of the cost of rebuilding your home reflects what it could cost to rebuild or replace all the elements and features of your home that are covered under your home insurance policy. As well as the new materials and labour costs associated with reconstruction, it should include an allowance for demolition and removal of debris, site clearance and preparation, compliance and professional fees such as engineering and surveying – and the calculator takes these into account. It does not include any amount for land value.

Why you shouldn't use a recent build cost

If you built your own home recently you'll know how much it cost at the time. However, this isn't a reliable indication of what it could cost to rebuild it in the future because the price of construction materials and labour changes, sometimes rapidly. This figure also doesn't allow for costs involved with rebuilding such as demolition and the removal of debris.

What about the mortgage?

If your home has a mortgage, the bank will probably require you to insure your home appropriately. If you are applying for a mortgage to purchase a house, you'll need to be ready to take out a home insurance policy for the home you buy. The amount the home has been mortgaged for is not necessarily suitable for insurance purposes. The mortgage amount will often include land, which is not covered by home insurance, and is likely to differ from the estimated cost of rebuilding the home.

Recreational Features and retaining walls

Retaining walls and Recreational features (i.e. permanently fixed swimming pools, permanently fixed spa pools and tennis courts) should be included when you work out the potential cost of rebuilding your home. However, under IAG-underwritten policies the amount of cover for these is limited or your policy may not provide any automatic cover. You need to check to see how much cover is provided under your policy and, if your policy does not provide any cover, or the amount provided is not enough, you may wish to purchase additional cover for these items.

Rebuilding retaining walls

Compliance as well as clearance and demolition costs can mean rebuilding a retaining wall is more expensive than it was to build in the first instance. For example, the building code may require a wall to be rebuilt differently to the way it was originally constructed. This may also involve engaging an engineer to devise the best approach.

If you share a retaining wall with your neighbour/s, it may be a good idea to discuss what amount of cover you should each have in place to reflect your respective shares of the wall.

Special Features of your home

Special Features, under IAG home insurance, are private jetties, piers, wharves or landings, bridges, culverts, permanent fords or dams, cable cars and a private utility plant such as a wind or water mill, or diesel generators including any associated equipment. These are not automatically covered under an IAG home insurance policy. If you require cover for any of these items you'll need to talk to your insurance provider and purchase additional cover.

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