Is Your Home Underinsured? The 80 Percent Rule
If the house is insured for less than the policy requires, how much of a claim is paid? Every piece below can be linked to, so it opens in a window on your reader's screen, current as of the record. No form to fill in.
2026 law · Reviewed September 7, 2026 · The full page, with methodology and sources · the terms · All tools
Embed the calculator in your page
The rebuild cost (from square feet or entered directly), the dwelling coverage, the policy's requirement, a loss, and the deductible in; the required coverage, the shortfall, the cents on the dollar, and the loss split into paid, deductible, and unpaid out. In a frame it carries no cookies, no tracking, and a visible link back to the methodology. Your site has to allow frames; most do. The link that opens it in a small window is on the professionals page.
Show the code
- In plain words.
- A homeowners policy requires you to insure the house for at least a share of what it would cost to rebuild, usually 80 percent. If you carry less, the insurer pays claims in proportion. Carry three quarters of what the policy requires and a claim is paid at 75 cents on the dollar, less the deductible. This tool estimates the rebuild cost from the size of the house or takes your figure, finds the coverage the policy requires, and shows what a loss you choose would actually pay.
- Why it matters.
- Coverage set at the purchase price years ago is measured against rebuild costs that have risen since. The penalty shows up on the first claim, which is the wrong time to learn about it.
- An example.
- A 2,400 square foot house at $200 a foot costs $480,000 to rebuild, so an 80 percent clause requires $384,000 of coverage. With $350,000 carried, a $100,000 loss with a $2,500 deductible pays about $88,646, and about $8,854 of the loss goes unpaid beyond the deductible.
- Where it stops.
- The rebuild cost is an estimate, and the agent's replacement-cost estimator is the real one. Extended replacement cost, an inflation guard, ordinance-or-law coverage, and an actual-cash-value policy each change the result, and the policy's own wording governs. The tool does not price the coverage or model the contents, other structures, or living expenses.
The facts
Six quotable sentences on the coinsurance rule.
The button shows exactly what your reader sees when they click the link. Paste the link where a link goes; it opens this list in a small window, always current as of the record, with the attribution and a link to the full page. Nothing to copy out, nothing to update later.
Show the code
- Most homeowners policies require dwelling coverage of at least 80% of the cost to rebuild the house. Carry that much and a partial loss is paid in full less the deductible. Carry less and every claim is paid in proportion, not only a total loss.
- The proportion is coverage carried over coverage required. A house that costs $400,000 to rebuild needs $320,000 of coverage under an 80 percent clause; a policy carrying $240,000 is three quarters of the way there, so a claim is paid at 75 cents on the dollar.
- The textbook case: on that policy a $100,000 loss with a $1,000 deductible pays $74,000, and $25,000 of the loss falls on the owner beyond the deductible.
- Example on this tool's defaults: $480,000 to rebuild, $350,000 of coverage, and a $100,000 loss with a $2,500 deductible. The policy requires $384,000, the claim is paid at 91.1%, and about $8,854 of the loss goes unpaid beyond the deductible.
- Rebuild cost is not market value. The land is not rebuilt, and a house in a cheap neighborhood can cost more to rebuild than it would sell for. The coverage is measured against the builder's number, which the agent's replacement-cost estimator produces.
- Extended replacement cost endorsements, an inflation guard, ordinance-or-law coverage, and actual-cash-value policies all change the arithmetic. The rule as stated here is the plain form, and the policy's own wording governs.
By coverage carried
How the claim payment falls as coverage falls short.
The button shows exactly what your reader sees when they click the link. Paste the link where a link goes; it opens this table in a small window, always current as of the record, with the attribution and a link to the full page. Nothing to copy out, nothing to update later.
Show the code
| Dwelling coverage | Share of rebuild cost | Share of the loss paid | Paid on the loss | Unpaid beyond the deductible |
|---|---|---|---|---|
| $300,000 | 63% | 78.1% | $75,625 | $21,875 |
| $350,000 | 73% | 91.1% | $88,646 | $8,854 |
| $384,000 | 80% | 100.0% | $97,500 | $0 |
| $480,000 | 100% | 100.0% | $97,500 | $0 |
Cite and link.
The clean address, a citation generated from the record so it can never carry a stale review date, and an address for every section so you can point a reader at the exact table or method.
Show the code
- Link
- https://consideratecapital.com/tools/home-coinsurance-rule
- Citation
- Considerate Capital, "Is Your Home Underinsured? The 80 Percent Rule," reviewed September 7, 2026, https://consideratecapital.com/tools/home-coinsurance-rule.
Link to a section
- The calculator https://consideratecapital.com/tools/home-coinsurance-rule#calculator
- The facts https://consideratecapital.com/tools/home-coinsurance-rule#facts
- By coverage carried https://consideratecapital.com/tools/home-coinsurance-rule#key-numbers
- How the rule works https://consideratecapital.com/tools/home-coinsurance-rule#how-it-works
- Methodology https://consideratecapital.com/tools/home-coinsurance-rule#methodology
- Revision history https://consideratecapital.com/tools/home-coinsurance-rule#revision-history
Everything here reads from one reviewed record, so a copied piece carries its year and its review date. When the law moves, the embed updates by itself; a copied table or chart keeps the year in its caption. Corrections are welcome through the contact page.