Rebuilding costs

Rebuilding or reconstruction costs are from 30 to 40 percent higher than new construction, according to some construction and insurance adjustment experts who responded to questions put to them by Marshall & Swift, a firm that has been a leading source of building cost data for over 60 years.

Those responding indicated that the experience developed because of such disasters as the Oakland, Calif. firestorm, Hurricane Andrew, the Midwest floods and the more recent Southern California wildfires, has brought into sharper focus, what was always considered a truism that reconstruction costs are considerably higher than the costs of new construction.

"In reconstruction following a fire, you are immediately faced with the problem of removing debris," Jack Anderson, president of Insurance Reconstruction Services in Smithfield, R.I., pointed out, adding that the debris "may well include hazardous materials adding substantially to the cost of removal and disposal."

Anderson said that even without these specific fire-related factors, reconstruction involves costs and challenges not found in new construction.

In addition to Anderson, Marshall & Swift also spoke with Bill Boyle, vice president of associated Construction Services, Hemet, Calif. and Steve Vedder, president of Vedder Software Group, Schenectady, N.Y.

"Very often you are working in a constricted area, a city lot, for example, with 10 feet or less between the house and the neighboring property," Anderson said.

"The building materials have to be brought in by dolly and the debris taken out by wheelbarrow. Further, the contractor will be unable to rely on heavier equipment. All the construction will depend largely on hand tools," Anderson noted.

"In addition, the insurance adjustment environment itself, from the first estimate to the actual reconstruction,...