Don’t pay out of pocket to rebuild your home


Is your home protected? Because your home may be the biggest investment you ever make, it’s important to understand your home insurance coverage and valuation.

When determining if you have adequate insurance coverage for your home, be aware of the subtle differences between home valuation terms.

  • Market value reflects the price a buyer is willing to pay for your home when considering the location, the desirability of the neighborhood, the quality and proximity of schools and other services. The home’s features and amenities also affect its market value.
  • Appraisal value is determined by an unbiased professional and is usually requested by a lender to make sure a homeowner doesn’t borrow more than the value of the home, since the home is used as collateral for the mortgage.
  • Assessed value is assigned by the local government municipality to a residence for tax purposes. This value tends to be lower than market and appraisal values.
  • Replacement cost is calculated by your insurance carrier to determine the expense involved to rebuild your home after a significant loss to the same condition prior to the loss, in its current location.

Rebuilding a destroyed home is almost always more expensive than building a comparable new one, considering demolition costs, complexities of reconstruction and required upgrades to meet current local codes and ordinances.


When comparing policies, it’s important to distinguish levels of replacement cost.

  • Basic replacement cost generally pays up to the exact limit of your policy.
  • Extended replacement cost generally pays to have your home repaired or rebuilt to its condition before the loss, even if the cost exceeds the policy limit up to a capped amount. The capped amount is an additional percentage, such as 25% or 50%, over the amount for which the home was insured.
  • Guaranteed replacement cost will pay to repair or rebuild your home to its original specifications regardless of the cost. There is no cap on the amount the insurance company will pay.

Nationwide Private Client offers guaranteed replacement cost1 to pay whatever it costs to rebuild your home with the same quality and features you have today.

How you may be at risk

Consider these scenarios:

  • Your home is insured at $1 million. After an electrical fire causes a total loss, it appears that it will actually cost $1.5 million to rebuild because of increased construction costs.
  • A fire destroys your $2 million home, which sits on two acres of land. In order to comply with local fire prevention ordinances, your home has to be moved three feet, which will cost an additional $2 million — as much as rebuilding it to its original state.
  • You purchased your dream home for $2.5 million. The replacement cost is estimated at $2 million. Six months later, your home is destroyed by a fire. Whole neighborhoods are destroyed. Demand, price for labor and construction material costs soar, driving up the cost to rebuild. The actual cost to rebuild your home is $4 million.

If you own a high-value home and are not insured by an affluent or high net worth insurance carrier such as Nationwide Private Client, you are likely to be underinsured if you have a total loss. You could be responsible for the additional costs to rebuild your home above the insured amount. Is that a risk you’re willing to take?

How Nationwide Private Client responds

In case of a total loss, we offer unlimited dwelling replacement cost1 coverage in most states. This means if you have a covered loss, we will repair or replace your home with materials of like kind and quality — even if the expense is more than the amount listed on your policy. If you choose to buy or build at another location, we will pay up to your coverage limit.

Nationwide Private Client homeowners policies include these additional coverage features:

  • Cash-out option — If you decide not to rebuild and instead want to cash out, we will pay you up to the limit shown on the declarations of your policy or what it would cost to rebuild at that location, whichever is less.
  • Building ordinances — You are covered up to 100% of the dwelling coverage limit for the additional costs incurred to rebuild in compliance with required local building codes.2 With our protection endorsement, this coverage amount is unlimited for dwellings and other structures.3
  • Deductible waiver — Your homeowners deductible will be waived for a covered total loss. With our protection endorsement, deductibles up to $25,000 are waived for a covered loss over $50,000 unless a special deductible applies.4
  • ProtectionPlus Consultation — Nationwide Private Client risk solutions professionals provide eligible new policyholders with a ProtectionPlus Consultation to review the home’s unique features and help avoid underinsuring the home.

Why it’s important for you

Regardless of your current carrier, it’s important to have a replacement cost valuation done on your home to determine if you are underinsured. Should you incur a total loss, you may have to pay out of pocket to rebuild your home to match equivalent pre-loss construction. If your home is valued over $1 million, standard industry tools used to determine home replacement cost might not adequately reflect its high-quality craftsmanship and custom features.

Nationwide Private Client offers these added benefits:

  • Specialized claims service: Our team of problem-solvers is available 24 hours a day, 365 days a year.
  • Financial strength: Nationwide, a Fortune 1005 company, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A1 by Moody’s and A+ by both AM Best and Standard & Poor’s.6
  • Charitable giving: At Nationwide, we strongly believe in being good corporate citizens where we work and live. Since 2000, the Nationwide Foundation has committed more than $588 million to charitable organizations across the U.S.
[1] Guaranteed replacement cost is not available in California.
[2] The damaged or destroyed building structure must be repaired or replaced at the residence premises. Other limitations and exclusions apply.
[3] Coverages and limits may vary by state. Other limitations and exclusion may apply.
[4] Unless a special deductible applies. Does not apply to losses caused by seepage and leakage of water not related to weather, unless an automatic water shutoff device is active at the time of loss. In CA, does not apply if cause of loss is wildfire or brush fire. In some states, applies to deductibles up to $50,000.
[5] Based on revenue, Fortune magazine (May 2022).
[6] These ratings were affirmed 5/27/20 by Moody’s, 12/22/21 by AM Best and 4/19/22 by Standard & Poor’s