Not quite. The sale price of a home includes the value of the home plus the land the home is located on. The replacement cost is equal to the amount you would need to spend to replace the structure. In theory, if your home experiences a total loss, you will still have the land. The replacement cost is the cost you need to rebuild your home on that land, and varies based on the style of the home, square footage, construction type and building materials. Before purchasing a homeowners policy, it is wise to have an insurance agent perform a cost estimator to determine the appropriate replacement cost. |
