If you have not updated your homeowners insurance since you purchased your home, there is a real chance your dwelling coverage no longer covers the actual cost of rebuilding. Between 2020 and 2024, residential construction costs in Georgia rose 35 to 45 percent. A home that cost $160 per square foot to rebuild in 2019 now costs $220 to $260. Most policies do not automatically adjust fast enough to keep pace.

What dwelling coverage actually pays for

Your dwelling coverage, listed as Coverage A on your declarations page, pays to rebuild your home's physical structure after a covered loss. It does not cover the land your home sits on. It does not cover your personal property or detached structures unless they are specifically listed. When a major loss occurs, the insurer pays up to your Coverage A limit. If the actual rebuild cost exceeds that limit, you pay the difference out of pocket.

How to estimate your current rebuild cost

Replacement cost estimators use local construction cost data, your home's square footage, construction type, finish level, and number of stories to calculate a current rebuild estimate. This is different from your home's market value, which includes the land and reflects what buyers would pay. A home can have a market value of $550,000 and a rebuild cost of $380,000, or vice versa. The number that matters for insurance is the rebuild cost.

Ask your agent to run a current replacement cost estimate using their carrier's cost estimator tool. Carriers use services like CoreLogic or Marshall and Swift to produce these estimates. The output is a cost-per-square-foot figure specific to your ZIP code and construction type. Multiply that by your home's finished square footage to get a current rebuild estimate.

Extended replacement cost and guaranteed replacement cost endorsements

Standard homeowners policies pay up to your Coverage A limit and stop there. Two endorsements can extend this protection. Extended replacement cost adds a percentage buffer above your limit, typically 25 to 50 percent, so that if rebuild costs exceed your stated coverage, the extension picks up the remainder to that cap. Guaranteed replacement cost, available from select carriers for qualifying homes, pays the actual cost to rebuild regardless of your stated limit. This is the strongest protection available for major losses.

Not every carrier offers guaranteed replacement cost. It is typically available for homes that meet specific construction criteria and are insured to at least 100 percent of the estimated rebuild cost at policy inception. Carriers that offer it in Georgia include Travelers and Chubb for qualifying accounts. We check eligibility as part of every homeowners review.

What to do right now

Pull out your homeowners declarations page. Find your Coverage A dwelling limit. Divide it by your home's finished square footage. If the result is below $220 per square foot for a standard Georgia home, your dwelling coverage may be inadequate at current construction costs. Send us the declarations page and we will run a current estimate and tell you where you stand.