Growing up we had a fire that burned down the garage and there was smoke/water damage through the rest of the house. My dad had what he thought was “full” insurance. It barely covered the garage and contents. He maxed out his claim to the limits and it didn’t involve rebuilding the main house.

Based on that experience we actually increased our coverage on per sf/construction cost.

But then again, we aren’t looking to just buy another house down the street.

In the cases of the wildfires, not only did construction prices increase… available stock decreased. When you have a large number of displaced households it may not be as easy to buy the replacement house down the street.