“Should we rebuild or sell?” sounds like one question. In practice it is several, and the answer depends on how they fit together for a particular property and a particular owner.
Five questions worth answering first
1. What will it really cost to build what you want?
Not what the original structure cost, but a realistic budget for the project you would build today, including soft costs and contingency.
2. What funds are available, and when?
Insurance proceeds, savings, and financing each arrive on their own schedule and with their own conditions. Timing matters as much as amount.
3. What will the property be worth in each scenario?
Compare the value of the completed property with the value of selling today, as-is. The difference, less the cost and carrying expense of getting there, is the economic case for building.
4. How much time and risk are you prepared to take on?
A rebuild is a commitment of years, not months, with the usual construction risks. A sale converts the property to certainty sooner. Neither is inherently better; they suit different people and circumstances.
5. What do you want the property to do next?
Be a home again, generate income, fund another goal, or pass to the next generation. The right path is the one that serves that purpose at an acceptable cost and risk.
Seeing the paths side by side
The most useful step is to put each realistic option (rebuild and retain, rebuild and sell, sell as-is, or a variation) on the same page and measure it the same way. Once the numbers and trade-offs are visible together, the decision usually becomes much clearer.
This article is general information, not legal, tax, insurance, lending, or investment advice. Every property and situation is different.