Over the past five years, most Westwood homeowners have felt it from both sides – home insurance premiums increasing year after year, and the cost to repair or improve their home rising just as quickly. Whether it’s a small project or a full renovation, everything simply costs more than it used to.
So what do these two trends have in common?
The cost to rebuild a home has risen sharply since 2020. Labor & materials are more expensive, and today’s building codes add another layer of cost. In many communities, constructions costs are up 40–60%. But here’s the disconnect: many insurance policies haven’t kept pace. Coverage limits have increased more slowly, leaving a growing gap between what a home is insured for and what it would actually cost to rebuild.
That gap is real, and most homeowners don’t see it until there’s a problem.
Higher-end finishes, renovations layered in over time, and the complexity of New England homes all push rebuild costs beyond standard estimates. A home insured for $1 million a few years ago could easily cost $1.5 million or more today.
The result is a gap that often stays hidden until there’s a claim, and by then, it’s too late. The difference becomes the homeowner’s responsibility.
This usually isn’t the result of a bad decision. It’s how policies are built, combined with how quickly construction costs have increased. Over the past few years, most homeowners were focused on keeping their coverage in place at a reasonable cost, not on whether their coverage limits were keeping up.
There is, however, a way to address this.
Some policies include an added layer of protection for exactly this situation. If the cost to rebuild comes in higher than expected, the policy can step in beyond the stated coverage limit. It’s often called “guaranteed replacement cost,” and it takes the pressure off getting the number exactly right upfront.
It’s not included in every policy, and even when it is, it usually doesn’t get much attention during the buying process. But with how quickly construction costs have increased, it’s become one of the most important features a homeowners policy can have.
In practice, it comes down to two things: making sure your coverage reflects today’s construction costs, and having the right protections in place, like guaranteed replacement cost, so you’re not exposed if a major loss occurs.
The good news is this is relatively easy to review.
Is your dwelling coverage still realistic for today’s construction costs? It’s not what the home would sell for, but what it would actually cost to rebuild. These are two very different figures.
Have there been upgrades over the years? A new kitchen, an addition, or a finished basement that may not be reflected in your current coverage?
Part of getting this right also comes down to who’s behind the policy. Local advisors often work with established and trusted regional carriers, like The Andover Companies, that understand the nuances of New England homes and how they’re built.
As the insurance market begins to ease, now is a good time to review your coverage. Not just the price, but whether it actually lines up with the home you have today.
Because while rising premiums have been more noticeable, the more important issue may be the coverage gap that’s been building quietly underneath.
A quick self-review is a good place to start. But having a knowledgeable advisor walk through it with you is where the real value shows up, especially when the goal is to get it right before you ever need to use it.
