Replacement Cost

Dwelling Limit and Replacement Cost

Your Dwelling limit is the same as your replacement cost - it's how much it would cost to build a home similar to yours in the location and on the lot where your home currently sits. 

What is Replacement Cost

Replacement cost is the estimate of the price of rebuilding a new home that is of like and kind quality to your old home. Replacement cost will depend upon a variety of factors, including construction costs, square footage, the quality of materials used to build the home and home features.

It's important to understand that replacement cost of your home is not the same as the market value of your home. The market value of your home is the selling price of your home. But this number incorporates more than just the value of the home itself. It includes the value of the land it's built upon, any improvements made to the land itself and transactional sales costs, such as the profit made on selling the property. The cost of building the home, the replacement cost, is just one factor contributing to the market value of a home.