There’s no one-size-fits-all answer to this question. Several factors influence whether rebuilding or restoring your home after a large fire is more cost-effective:
Extent of Damage: The severity of the fire damage is the biggest factor. If the fire primarily affected one room or a specific area, restoration may be feasible. Most of our large fire losses have extensive structural damage. Most involve gutting the interior and re-framing the attic framing completely. It is best to have us inspect it to see what’s possible.
Insurance Coverage: Your homeowner’s insurance policy dictates the amount your insurance company will cover for rebuilding or restoration. Most policies offer replacement cost coverage, which pays to rebuild your home to its pre-fire condition. Others offer Actual Cash Value (ACV) coverage, which factors in depreciation. Understanding your coverage limits will help determine the financial viability of each option.
Building Codes & Regulations: Local building codes and regulations may require upgrades that weren’t present in the original structure. These upgrades can add to the overall cost of restoration but can also improve your home’s safety and value. Some policies have extended coverage for code requirements.
Taking Advantage of the Opportunity: A fire, while devastating, can present an opportunity to rebuild your home with modern features and layouts that better suit your needs. However, incorporating upgrades will likely increase the overall cost compared to a straight restoration.
Here’s a general breakdown:
Restoration: Typically less expensive than rebuilding, but only if the damage is limited.
Rebuilding: Often the only option for extensive fire damage. Can offer a chance to modernize your home, but comes at a higher cost.