Market Value vs Reconstruction Value

Ensure that your homeowner’s policy limits correspond to the cost to rebuild in case of a natural disaster, whether it is a wildfire, tornado or flood. Unlike a home’s market value (which includes the cost of the land), the cost to rebuild is determined based on the amount needed to hire a contractor plus building materials and other additional costs.

Know Your Estimated Replacement Cost home construction

You decide how much coverage to buy for your home, but Prairie Villa Insurance  recommends purchasing coverage at least equal to the estimated cost of rebuilding your home.

How Does this Differ from Market Value?

The market value of your home is the amount a buyer would pay for your home, including the land, no matter how much rebuilding would cost.

What is Replacement Cost?

Replacement cost is the rebuilding cost necessary to repair or replace the entire home, including construction costs. This cost is different than:

  • The market value
  • The purchase price or the cost of the land
  • The amount owed on a mortgage

How do I Know Replacement Cost?

Get an estimate of the replacement cost of your home from a reputable builder. Prairie Villa Insurance  also has software that will provide an estimated rebuild cost.

Home Improvements

When making a major change, inform Prairie Villa Insurance . Let us know specifics – for example, if you’re installing a standard bathtub or a whirlpool tub, or if your counter tops are now made of marble. It all adds to the value of your home.

We’re Here to Help

Have other questions or doubts? Prairie Villa Insurance is ready to assist you in the process of determining the value of your home and purchasing the right coverage to protect your investment.