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Understanding Insurance


ATTENTION, HOMEOWNERS! We want to talk to you about….


I know you’re excited, right? I mean, I can’t tell you how many people just bombard us on the streets with their enthusiastic questions and jump on any and every opportunity to go over the details of their policies.

We get it. It’s not the World Series. You are most likely not going to be pumped to spread the news with John at the water cooler on Monday that you understand the difference between Coverage A and Coverage B. Although, let’s be honest. John’s a know-it-all and you’d love to really show him up with your newly discovered and totally life applicable knowledge.

Infuse Insurance really wants to help our customers understand their coverage and options. It’s important to us that you feel empowered and in control of your insurance policies. That’s why we’re starting a series to answer some of the most frequently asked questions. Today, we’re going to tackle THE MOST asked question when it comes to homeowner’s insurance!


Well, if you were to sell your home right now, what would be the market value of your home?

How about we go with a good old round number just to get us going!

Let’s say your home has a market value right now of $100,000.

Awesome! What a nice home you have! I bet John even loves the historical district it’s located in because he can show off his knowledge of the progression of American architecture. But I digress.

So, if your home is valued at $100,000 and you insure it at that amount, you’re covered, right?


You must insure your home for what’s called replacement cost coverage. What is it going to cost to come in and replace your home from the ground up after a total loss?

On a normal basis, if you speak with any reputable contractor, you’re looking at somewhere around $125 per square foot (as of early 2019). Now of course that number is going to change for a number of reasons as time goes on. The price of materials may change, labor charges and inflation will all tie in to how much your replacement cost will be.

Also, you’ll need to keep in mind that the material of which your home is built will play into that replacement cost as well. Vinyl siding? How about some good old solid brick? Hearty plank? And that barrier between your home and the heavens has to be thought of as well. What is your roof made of? And what’s the age of those materials? There are a lot of factors to consider when calculating a replacement cost, including that lovely historical district where your home is nestled.

So then the next question we often hear after explaining what goes into the calculations of replacement cost and why we insure for replacement versus market value usually sounds something like, “AM I GOING TO BE OVER INSURED?!” Some customers can’t believe an insurance company would ever pay them that much money in the case of a total loss.

Let us put those fears to rest for you, friends!

Did you know that West Virginia is a valued policy law state? That basically means that if your real property is destroyed by fire, the insurance company is required to pay you Coverage A, which is the replacement cost amount that’s listed on your insurance policy.

There’s you a nice little fact for water-cooler John.

And just to help it stick in your head and because everyone like lists, let’s recap what we’ve learned today!

5 Quick Facts about Replacement Cost for Homeowner’s Insurance


  1. Homes are insured for the replacement cost, not the market value of the home.

It costs more to rebuild a home from the ground up than it would to purchase that exact  same home that’s already standing.


  1. Your replacement cost may fluctuate over a period of time.

Inflation, costs of materials, and increases in labor cost will all affect how much it costs to rebuild.


  1. The materials with which your home is built will be considered when calculating your replacement cost coverage.

If you’ve built with stone or siding, along with the material roof and its age will all factor into your cost to replace them.


  1. The location of your home may also affect how much coverage you need.

Replacement materials for a home in a historical district tend to be more costly.


  1. You won’t be over-insured,  your insurance company will pay you your benefit!

If your home is completely destroyed by a fire in a valued policy law state, you can rest assured that you will receive the replacement cost Coverage A benefit backed up by the value coverage law.


Homeowners, we want you to feel secure knowing that you’re covered. The last thing you need to think about when the unthinkable happens is how much coverage you should have or worry that you won’t have enough insurance to take care of your family moving forward. It’s our goal to work with you to understand your coverage so that you can worry about your real priorities. If you want your other insurance questions answered by our experts here at Infuse, please leave a comment below! We want to help give you the clarity you need so you can have the security you deserve.

And please, tell John we say hello.

And that he should really get back to work.