Does home insurance cover the current market value of my property?

Home insurance does not cover the market value of your property. When you apply for homeowners insurance, the insurance company uses what’s called a “replacement cost estimator” (RCE) to determine what it would cost to completely replace your home based on its age, size, materials, and characteristics. This is the value your home is insured for. Market value typically includes the cost of the land and doesn’t always match up to what the RCE value is.