Reconstruction after fire - Is the cost level justified?

Hello :)

Our house burned down a few months ago. It had to be rebuilt down to the foundation. So far, so good.
The house was built in 1936, just a normal single-family home. Now we have a complete offer for restoration of over €350,000.
Roof, facade, insulation, masonry, windows, etc. Everything basically^^
Now the question is, is the price justified? Our insurance agent almost fell off his chair and can’t believe that this little amount costs so much. Just the masonry alone costs €70,000... which is more expensive than the roof.
Now the question is whether this is a rip-off or if prices have just gotten that high nowadays.
Until now, we didn’t have to worry because everyone said everything is fine and going as planned. But now the insurance coverage is not enough and everything is currently stopped. It’s not that bad because the fire department couldn’t put out the fire since no water came from the hydrant, and the city must take liability (according to the police it was not an isolated case and we should approach the city). It was even in the newspapers everywhere because of the water pressure.
We actually wanted to avoid all this because now we have to go to a lawyer and everything will take ages...
I just wanted to hear your opinion. So far the project manager has managed everything, finding the companies and so on. And now this...

Another question: is it even worth it or is it cheaper and easier to build a prefabricated house? Or to completely demolish everything and build from scratch?
Or is this not much better price-wise either?
The house should be about 160m². Bedroom, bathroom, kitchen, living room... on the ground floor and upstairs just living and bedroom... everything should cost around €250,000.
We have no experience with anything like this. And a prefab house is said to have so many hidden costs.
Our insurance will come again on September 17th. Now the question is which direction we should take. Reconstruction or new build?

Hope someone can help us and maybe answer one or two questions... the whole thing has gotten a bit more complex^^

So I have to tell you unfortunately in general terms: prices are like this today, you won't get around it and a prefab house is not cheaper than one made of bricks.

I would steer it in the direction that is better for you, I don't think you will get it cheaper with either if the house is totally destroyed anyway....

hm you have insurance and according to your statement the city is also liable. So I don’t understand why you’re worried?? Is your insurance broker retired? Or does he still make his living with 15 Pfennig? The insurance sum is one thing, the description of what you are supposed to get for it is another. Usually, it’s the case that it has to be brought to a habitable condition. And that is 2018. I wouldn’t cut anything off or accommodate the insurance or the city. I would also include all new technology, possibly pay for it myself. After all, you’re basically getting a new building. But interesting topic. Please get a knowledgeable lawyer who sorts everything out! It’s clear now that it’s important to regularly check your insurance conditions. 100,000 DM are simply no longer worth anything.

Price is about right for 160 sqm. AI secondary construction costs. It's going to be a new build with a basement anyway, as I understand it? Don't worry and order your house from the insurance.

Well, the problem is that he is underinsured. The city will not pay voluntarily either; there will be a long legal battle and expert reports will be commissioned one after another. If the fire brigade had extinguished it, everything would have been damaged by water, which is not much different. I wish you good luck that you come out of it relatively unscathed.

Where does he say that he is underinsured? Depending on how old the policy is, he can hardly be, sliding new value factor or construction price index etc. If, for example, he concluded his insurance sum based on the value from 1914, a more or less exact value was determined system-side, if the advisor didn’t trick to get a cheaper premium, I rarely see an underinsurance problem with the WOG here... Insurance reimburses the house as mentioned by others according to the same type and quality to the current construction standard. If you had 160 sqm, you won’t get 200 but also not 120, whether the insurance takes recourse with the city can then be irrelevant to you ;)