Hilton Insurance News

Understanding Costs Related To Reconstruction

June 7th, 2016

Understanding Costs Related To Reconstruction

Why does it typically cost more to reconstruct after a loss than a new construction.

After a loss such as fire or severe weather, many factors come into play for the reconstruction.
Here are some of the challenges present that are not with new constructions.

Labour: Due to the skill set involved in reconstructions, the contractors need to be more experienced this causes more expensive labour costs.

Material: Material cost are evaluated based on the loss and may cost more since it may not involve the savings acquired on bulk purchases associated with new constructions.

Site Mobility: The site itself must be taken into consideration by the contractor before completing the restoration/reconstruction. These factors are not normally present in a new construction.

These factors are:


Considerations must be taken if the adjoining property/buildings are occupied to keep their day-to-day operations running smoothly including noise and dust control.

Time Urgency: Any costs incurred to get the reconstruction back to original state will involve more expensive labour and materials as the contractors premium costs go up to accommodate the hours/additional shifts required to finish the project in a timely manner.

Dangerous & Hazardous materials: With older buildings, the contractors must be assured that there are no hazardous materials in the buildings. These materials (asbestos, lead, mold, etc.) may require professional inspections and containment increasing the handling fees further, creating delays and impacting productivity.

Construction Process: Logistical challenges after a loss is rarely straight forward such as weather, structure and utilities that remain. Unexpected occurrences are more common than in new construction. These changes can prove more costly.

By taking into account all the circumstances and costs involved in a reconstruction, it is important to be more conscientious in placing the value of the insurance.

If you have any questions about this topic, please contact Hilton Insurance at 204-488-4484. Our brokers are available to assist you.



Ted Hull Consulting FYI


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Hilton Insurance News

Understanding Costs Related To Reconstruction

June 7th, 2016

Understanding Costs Related To Reconstruction

Why does it typically cost more to reconstruct after a loss than a new construction.

After a loss such as fire or severe weather, many factors come into play for the reconstruction.
Here are some of the challenges present that are not with new constructions.

Labour: Due to the skill set involved in reconstructions, the contractors need to be more experienced this causes more expensive labour costs.

Material: Material cost are evaluated based on the loss and may cost more since it may not involve the savings acquired on bulk purchases associated with new constructions.

Site Mobility: The site itself must be taken into consideration by the contractor before completing the restoration/reconstruction. These factors are not normally present in a new construction.

These factors are:

  • All debris from the site must be removed prior to reconstruction. This work may include parts of the building to be demolished.
  • Protecting existing landscape, neighbouring properties and other site improvements such as overhead and underground utilities.
  • Limited on site storage space. This may require more staging for offsite storage thus adding more cost to the handling charges.
  • Any machinery, equipment and original buildings that need protecting from damage to be re-used in the reconstruction will also add to the handling fees.


Considerations must be taken if the adjoining property/buildings are occupied to keep their day-to-day operations running smoothly including noise and dust control.

Time Urgency: Any costs incurred to get the reconstruction back to original state will involve more expensive labour and materials as the contractors premium costs go up to accommodate the hours/additional shifts required to finish the project in a timely manner.

Dangerous & Hazardous materials: With older buildings, the contractors must be assured that there are no hazardous materials in the buildings. These materials (asbestos, lead, mold, etc.) may require professional inspections and containment increasing the handling fees further, creating delays and impacting productivity.

Construction Process: Logistical challenges after a loss is rarely straight forward such as weather, structure and utilities that remain. Unexpected occurrences are more common than in new construction. These changes can prove more costly.

By taking into account all the circumstances and costs involved in a reconstruction, it is important to be more conscientious in placing the value of the insurance.

If you have any questions about this topic, please contact Hilton Insurance at 204-488-4484. Our brokers are available to assist you.

Hilton Insurance
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(204) 488-4484 Email: info@hiltoninsurance.com
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