What’s the difference between market value and replacement cost? 🛠️🏠

Market value is what your home would sell for. Replacement cost is how much it would cost to completely rebuild it.

So, you’ve just put down a huge amount of money or taken out a large mortgage loan to buy a house. Great! Now, how do you make sure it’s actually protected? Easy – it rhymes with gnome kinsurance.

But how do you know that you have enough home insurance to make you happy, make the bank happy, and actually cover everything that you’ve just spent money on?

Well, let’s clarify. Let’s say that your house burns down. A lot of people think that insuring their place for its market value will be enough to rebuild their house.

Nope. False. Your home’s replacement cost value is not the same as its market value. We’ll explain.

Adulting is hard. Get insurance quotes live in chat.

What’s the difference between my home’s market value and its replacement cost?

The market value of your home would be what your house would sell for before it bit the dust. It doesn’t account for the building materials, the construction workers, etc. that it would take to build your house back to normal. So, if you were to insure your home for its market value, you’d have to pay the difference between what your insurance covers and the actual cost of what it takes to rebuild your house.

If you want to stay in your neighborhood and just rebuild the house, then you’ll have to insure your home for its replacement cost value. That’s the one that will account for things like the building materials, construction workers, yada yada.

So, do you want to use your home insurance to its full potential or do you want to be left with a massive bill in an emergency?


Luckily, getting a greater amount of coverage to rebuild your home doesn’t have to come with a huge price tag. Just click on the chat bubble in the bottom right-hand side of the screen and chat up our agents who will be more than happy to help you find the home insurance you need.

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