What is the difference between “replacement cost” and “market value”?
Replacement cost is the amount it costs to rebuild a home or structure. This amount can also include demolition. This value can be significantly different than an appraisal. Reason being, the cost of materials to rebuild can outweigh a home or structure’s market value. When insuring a home or structure the insurance company needs to know the replacement cost. There are tools that our agents use to help approximate this value.
CA Dept of Insurance 0659943