For insurance purposes, your home is insured at replacement cost. This is the amount it would cost to rebuild a home from scratch. This factors in similar building materials, heating and cooling systems & more! Non-material costs are considered as well, including permits, fees, debris removal, contractor labor, overhead and profit. The amount your home could sell for is known as market value which takes factors such as neighborhood, home values around you and the real estate market into account. By insuring your home on replacement cost, you are getting the coverage you truly need should you ever suffer a total loss. Insurance companies don’t care about market value.