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Market Value vs Replacement Cost

By Brandon Tritten

34 Days of Homeowners Insurance
Day 020 | Market Value vs Replacement Cost

You bought your home for $220,000, but your insurance agent wants to insure your home for $290,000.

Where did that number come from?

Replacement Cost is how much it will cost to repair or replace your home in the same spot, using the same quality construction, at today’s cost.

Market Value is what someone would pay you to buy your home today. Market Value includes the land your home sits on, outbuildings, any improvements to the property, and of course your home. There are several variables with Market Value, but a few are where your home is located, the school district, and recently sold, comparable homes.

How Do You Determine Replacement Cost?

To determine Replacement Cost, insurance agents have access to an estimating guide to determine the replacement cost of your home. It factors in the structure, fixtures, and finishes of your home. Land value is not included.

The objective is to insure your home properly so at the time of loss you’re made whole again.

34 Days of Homeowners Insurance

Filed Under: Homeowners Insurance Tagged With: 34 Days of Homeowners Insurance, Homeowners Insurance, Market Value, Replacement Cost

About Brandon Tritten

When not working, you can catch Brandon running, biking, or watching Cardinals baseball with his wife.

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JBLB Insurance Group

233 Main St
Platte City, MO 64079

  816.858.3000
  Text: 816.312.4420 This phone number will not accept pictures via text message. You may email pictures to tawnya@jblbinsurance.com.
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