Homeowner’s Insurance – Replacement cost versus Market Value

New Home Construction

Replacement Cost vs Market Value 

One of the biggest questions consumers have regarding homeowners insurance revolves around the amount of insurance to place on their home.  When purchasing a home, most consumers assume the amount of dwelling coverage will be equal to the amount they paid for the home.  This is not always the case.  Replacement cost is the cost to rebuild your house in the same spot, same size and same quality of construction, at today’s costs.  An example: a home purchased in a depressed city neighborhood, may have a market value of $120,000. The exact same house, located in a nice suburb, may have a market value of $285,000; however, the cost to rebuild the home after a loss would be the same in either location.


Homeowner’s Insurance is something that most of us set up and then don’t think about again, until we need it.  Take this quick post as a reminder to talk to your insurance agent to ensure you and your home are adequately covered.    Homes are our refuge, they hold our possessions and more importantly, our memories, which thankfully will always be with us if something happens to the house. 

Thank you for reading the First Weber Wisconsin real estate & Wisconsin living blog for information on homeowners insurance – a fact of life for most homeowners. If a new home in Wisconsin is in your future, please search firstweber.com and don’t forget to get a new homeowners insurance policy before your loan closing.

photo credit http://www.flickr.com/photos/greatvalleycenter/38286807/

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