One of the biggest questions consumers have regarding homeowner’s insurance revolves around the amount of insurance to have on their home. Many assume the amount of dwelling coverage will be equal to the amount they paid for their house. That is not always the case.
There are different methods to determine the value of a house. Market value is the price paid for your house. Replacement cost is the price or cost it will take to rebuild your house in the same spot, same size and same quality of construction, at today’s costs.
The insurance company is looking to insure the home for the full replacement value, not the current market value.
Compliments of RAND Insurance, Inc. a member of the EACCNY