By Allen McQuiston 
Jemez Insurance Agency
Serving Los Alamos Since 1963

Somewhere on your declarations page there’s a dollar figure next to the word “dwelling”. It’s a specific number, often down to the hundreds, and it looks like the product of research. Most people read it once, decide it sounds about right, and never think about it again.

That number is an estimate. It was almost certainly generated by replacement cost software, and software is only as good as what gets typed into it. Nobody measured your kitchen. Nobody looked at your roof.

None of that means the number is wrong. It means the number was produced without the one person who actually knows what’s in the house, which is you.

Where the Number Usually Comes From

• Replacement cost estimators pull square footage and basic characteristics from public records, then apply regional construction cost data and a general quality grade. It’s a reasonable system for producing a reasonable starting point on a typical house.
• The trouble is that public records go stale, and “typical” does a lot of quiet work in that sentence.

What the Software Doesn’t Know

• The addition or finished basement that never made it into the county’s square footage.
• The kitchen you gutted four years ago, or the bathroom tile that isn’t builder-grade anymore.
• The windows you upgraded, the roof you replaced with better material, the custom cabinetry someone built on site.
• The fact that half the value of your house is in finishes that no database has any record of.
• A quality grade is a rough sorting mechanism. It cannot tell the difference between two houses of identical size where one was finished in 1978 and left alone and the other has had two decades of careful money poured into it.

What It Also Doesn’t Know About Rebuilding Here

• Cost tables are regional averages, and averages don’t account for a small contractor pool, materials that have to be hauled a long way, or a lot that’s tight enough to complicate staging and access. Building codes also change, and a house built decades ago may need to meet requirements today that didn’t exist then.
• There’s a bigger version of this, too. After a regional event, everyone rebuilds at the same time, and labor and materials price accordingly. That’s the scenario the number is supposed to survive.

The Version That Actually Works

• Walk through the house and write down every improvement since you bought it, with rough dates and costs.
• Take photos of finishes, fixtures, and anything custom, and store them somewhere that isn’t inside the house.
• For an unusual, older, or heavily renovated home, consider a contractor’s estimate or an independent replacement cost appraisal as a reality check.
• Bring it back up after any significant project, rather than waiting for a renewal to prompt you.

What Else Is Riding on That Number

• This is the part people miss. The dwelling figure isn’t a standalone item. Coverage for personal property, other structures, and additional living expenses is often calculated as a percentage of it, which means one soft number can quietly pull several others down with it.
• It’s also worth asking separately about extended replacement cost options and building ordinance coverage, since those address exactly the gaps that estimating software tends to leave behind. Those are good questions to bring to a review, and a good agent will be glad you asked rather than defensive about it.

On a personal note. My wife’s childhood home burned to the ground in the fire that struck Boulder, Colo., in December of 2021. We knew the owners who bought her old home and many others on that street that lost homes. They all told us similar stories.

The cost to rebuild their home was 25-50 percent more than they had insurance for. The reason? The contractor could jack up their prices because of the amount of homes that needed to be rebuilt. Insuring your home with the correct amount of insurance and then having an extended building cost option to add additional protection when the unexpected happens is wise. It is important to get the numbers right.

For additional helpful articles, visit thejemezagency.com.