Home insurance

by David
(Aurora, Ontario, Canada)

If the amount for the coverage of Dwelling Building is more than the market price of the house, it is reasonable?

Ontario Home Insurance: Market Value vs Rebuilding Value

Hi David,

Yes, this happens a lot. Many houses are insured for more than market value.

Insurers have formulas for calculating rebuilding values and unless you live in a major market like Toronto or Vancouver it's easy to be insured over market value.

The formula includes increased costs like:

• demolition of what's left of the building


• Having to work around landscaping and neighbouring structures (unlike when a home is built new and there is lots of room to work)


• Increased costs for getting contractors in on an urgent basis



This is just a small sample of increased costs that insurers have when rebuilding.

Hope that sets your mind at ease!



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