Navigation Menu+

Rebuild Cost vs. Market Value


With the inflated home market values recently in West Michigan we are seeing two things happen: Home sale prices are much higher than rebuild cost in areas with high land values (such as waterfront), and sometimes home sale prices are much lower than rebuild costs in certain emerging markets.

When you insure your home, make sure that you pay attention to the rebuild cost, not market value. Insurance coverage that matches the sale price could mean that you are paying more than you need to for insurance. Remember, the goal of insurance is to rebuild your home back to the way it was originally built. If your home could rebuild for $200,000 and you were insured for $300,000 you would not get a check for the difference, thus overspending on premium by $100,000.

To Sum Up: Take a minute and have your insurance reviewed; it may surprise you what you find out.

About the Author: Alistair Lynch is the owner of the Lynch Agency at Farm Bureau. Feel free to give Alistair a call at (616) 940-7043 or send him an email to if you have any questions or would like more information.


Office: 616.363.7788