Replacement cost
Estimates the cost of labor and materials needed to rebuild the insured structure with comparable construction.
Market value
Reflects a possible selling price and includes land, location, supply, demand, and neighborhood conditions.
Why they differ
Construction costs can rise even when real-estate prices fall, and valuable land can raise market value without increasing rebuilding cost by the same amount.
What to review
Keep square footage, construction type, major features, additions, and renovations current so the rebuilding estimate remains useful.