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Alta Vista Insurance Agency

2585 Pio Pico Dr, Suite 100
Carlsbad, CA 92008

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Replacement Cost vs. Market Value

Home Insurance: Do you have enough coverage?

As the market shifts its’ important to understand how to fully protect your home and your lifestyle. After the recent Woolsey and Camp fires, which destroyed nearly 8,000 homes, homeowners need to be aware of  how much coverage is required to replace your home if it is destroyed by a covered peril. 

Insurance 101 Tip: A peril is a specific risk or cause of a covered loss. 

Common covered perils are fire, wind or hail, and water damage. One of the best ways to determine insurance coverage for a home is understanding replacement cost vs. market value. 

This infographic from, The Hartford, is a great way to understand the difference between the “cost to rebuild” and the “cost of the air”. Replacement cost is based on how much coverage is require to rebuild a home to its original state before the loss. Market value is based on confidence or how much someone is willing to pay for a home. 

Remember, replacement cost can be very different from the market value of a home and after a large natural disaster, like a wildfire, replacement costs can rise significantly due to supply and demand, cost of labor or materials, and transportation costs associated with rebuilding. 

Have you reviewed your property insurance lately? Don’t wait until a disaster happens to find out your coverage is inadequate. 

Take the right path with your insurance! Start our personal TRAIL today! 

Learn more about the important things you need to know about home insurance. 

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