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What is the difference between Replacement Value and Market Value?
Homeowners’ insurance policies often provide replacement cost coverage for the dwelling in the event of a loss.
As such, insurance companies require policy holders to purchase an amount of insurance equal to the cost to rebuild the home using current construction costs.
This is very different from the market value of the home. The market value of a home is the amount the home is worth if you were to sell it today.
The two amounts can be very different. Most replacement cost policies require you to carry a certain percentage of the replacement value (Normally 80%) at all times. If you fail to carry the correct amount of coverage, you may be responsible for a percentage of a partial loss.
- Hoffman Home Insurance
NOTE: The answers to coverage questions are primarily based on ISO forms generally used in Florida by most companies. However, please keep in mind that all companies’ forms are NOT necessarily the same. Some companies may provide broader coverage and some may be more restrictive.
IN ALL CASES, THE CONSUMER MUST REFER TO HIS OR HER OWN POLICY FOR SPECIFIC COVERAGE INFORMATION.
Our Melbourne Home Insurance Agency is centrally located in Brevard County, enabling us to locally serve Viera, Cocoa Beach and Palm Bay.
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