Replacement Cost of Dwelling

We received our mortgage commitment today and it says that we must have a homeowner's insurance policy that "must be in an amount at least equal to the full replacement cost of the dwelling" I am completely new to this whole process so my question is how do I know what the replacement cost of my dwelling would be?

Re: Replacement Cost of Dwelling

That basically just means "Home Owner's Insurance". Insurance companies insure your house for what it would cost to rebuild, not what you paid for the property. After a complete house fire, where there is nothing left of the house, you still own the land, which is a good deal of the purchase price of the house.

The insurance company will take care of the replacement value.

Re: Replacement Cost of Dwelling

The insurance co comes up with the replacement value, which they get from comps and sq footage of your house. I always had questions about this b/c what if what THEY come up with isn't what it would really cost in the event of a fire? But the most they would go above the replacement value they came up with for me was about 50,000, when I expressed my concerns.

Re: Replacement Cost of Dwelling