When you think of what your home is worth, you tend to think of either what you paid for it, or the price you can sell it for on the open market. This may be affected by factors beyond the size and features of your home, such as its neighborhood, school system, market demand and many other external considerations.
Market value is the estimated price at which your property would be sold on the open market between a willing buyer and a willing seller under all conditions for a fair sale. Replacement cost is the estimated cost to construct, at current prices, a building with equal utility to the building being appraised.
Some factors that go into replacement cost
- Roof and shingle style and quality, which can vary widely from home to home
- Exterior features like porches, decks, and breezeways
- The age and quality of your heating and cooling systems
- The materials used in your kitchen and/or bath
- The style of your garage, and whether it is attached
- Present-day costs of building materials and labor
- The costs of debris removal, which are not included in new home construction
Replacement costs can change during the life of your home. That’s why it’s important to make sure you have the coverage you truly need should you ever suffer a total loss. Contact Professional Underwriters, who have the tools and expertise that can help you determine the right replacement cost for your home.