What is Replacement Cost home insurance and why is my house insured for more than the assessment?
There are 3 values concerning any home in Virginia.
- Market Value – the amount you could sell your house for.
- Assessment Value – the amount the city or county charges you for tax purposes.
- Replacement Value – the cost to rebuild your home.
Insurance companies are concerned with the cost to rebuild your home and there fore they Replacement Cost value when insuring your home.
Replacement Cost can be considerably higher than the assessment value or market value depending on your location and the age of your home. Older homes are more expensive to build then newer homes.
If you disagree with the amount of insurance on your house, ask your agent to run a new MSB estimate and see what amount is generated.