Replacement Cost v. Market Value: What’s The Difference?

Young couple unpacking cardboard boxes at new home.Moving house.

Question: What affects the cost of your insurance policy: your home’s market value or replacement cost? Answer: Replacement cost.

What Is Replacement Cost?

Many people think that home insurance should match their loan amount or what the real estate market deems their home worth. If your home was destroyed, your home insurance coverage should be for the replacement cost or how much it would cost to rebuild your home.  Your home insurance coverage is to leave you whole in the event of a total loss.

How Is Replacement Cost Calculated?

Sometimes called dwelling coverage; replacement cost, protects all structural elements attached to your home. This includes but is not limited to:

  • Framing of your home
  • Roofing material
  • Number of fireplaces
  • Plumbing, Electrical, and HVAC system updates
  • Number of Bathrooms
  • Kitchen
  • Do you have a deck?

Increasing Your Protection Is Easy

There are extra insurance coverages that can be added to your home policy for a minimal cost that can help protect one of your biggest assets – your home. We want our clients to have peace of mind that they are protected from a financial disaster.

Call R.C. Keller & Company

We have been protecting homeowners in Schaumburg and the surrounding cities since 1910. Do you have enough dwelling coverage to rebuild your home today? If you aren’t sure give one of our trusted advisors at R.C. Keller & Company a call to review your policy. Call 847-907-4520 today.

We offer more than just a policy

See what we can do for you today