What is insurance value vs. market value?

Insurance Value (Replacement Cost): The cost to rebuild your home from scratch. Market Value: The amount your home would sell for in the current real estate market, including land value.

Insurance value is the cost to rebuild your home, while market value is the price at which your home would sell, which includes the land and other factors like location. The insurance value should reflect the replacement cost, not the market value.

The market value of your home might be $500,000, but the insurance value could be $300,000 because it only needs to cover the cost of rebuilding, excluding land value.

Make sure your insurance value reflects the cost to rebuild your home, not the current market value. Regularly review your coverage to keep up with any changes in construction costs.