At SIA Insurance, we love the coast. The salty air, the sunshine, the palm trees… and of course, those jaw-dropping home prices that make you wonder if you just bought a house—or a slice of beachfront heaven.
But here’s a little nugget of wisdom from your favorite neighborhood insurance superheroes:
You can’t insure the sand under your feet.
Let’s break it down like a beach chair after Labor Day:
There’s a big difference between market value (what you paid for the home) and replacement cost (what it costs to rebuild it if it’s damaged or destroyed). And when it comes to insurance, we’re all about the replacement cost.
🌴 A Coastal Example: Meet Sandy & Her Slice of Paradise
Sandy bought a beautiful beachside bungalow in Ponce Inlet for $900,000. Sounds fancy, right? But here’s the catch: half of that price is the land. Yep. That plot of salty soil is worth $450,000 all on its own.
The house itself—if a storm, fire, or rogue flamingo were to wipe it out—would cost around $450,000 to rebuild. That’s the replacement cost.
So why not insure the whole $900,000?
Because no matter how big the hurricane, your land isn’t going anywhere (unless you’re in a movie about sinkholes or alien abductions). Insurance doesn’t pay to replace the dirt. It pays to rebuild the structure.
🛑 Market Value ≠ Insurance Value
Let’s clear up the lingo:
- Market Value: What your real estate agent brags about. Includes the land, the location, and how trendy your zip code is.
- Replacement Cost: What your contractor charges to rebuild your actual house—walls, roof, windows, kitchen sink, and all.
If we insured your home based on market value, you’d be overpaying for coverage you can’t even use. That’s like buying an extra-large pizza and only getting charged for the toppings.
💡 Why It Matters
If your home burns down or gets damaged in a hurricane, your insurance policy will pay to rebuild the house—not buy back your land, not pay off your mortgage, and certainly not fund your fantasy of moving to Bora Bora.
At SIA Insurance, we calculate the estimated replacement cost based on building materials, square footage, labor costs, and current building codes. And if you ever need to use your policy, this number ensures you can rebuild your home just like it was—or better.
🏡 So, What Should You Do?
- Don’t panic when your policy coverage is less than what you paid for the home.
- Ask us questions! (We love explaining this stuff—and we speak fluent “insurance-ese.”)
- Trust that we’re not cutting corners. We’re just not insuring the sand under your house.
👋 Bottom Line?
You bought the view, but we’re covering the house.
So next time someone asks why your $900,000 beach house is insured for only $450,000, just smile and say,
“Because I don’t need to file a claim on dirt—and neither do you.”
Need a second look at your policy or a quote with the right replacement cost? Call us anytime. We’re your coastal coverage crew, sunscreen not included. 😎
