
There are two key distinctions that every homeowner should know: “Replacement cost” versus “Market value.” Replacement cost covers repairing or replacing your entire home. Market value is how much someone would pay to buy your home and accompanying land in its current downtrodden condition.
For those who have a good emergency fund in place, Derrick says that there is a way to possibly get more substantial coverage and still pay lower premiums: “You might consider getting a policy that covers more in terms of replacing or rebuilding your property, but with a higher deductible.”