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Forget real estate market value. Insurance value is all about construction costs.

In some cases the cost to rebuild might exceed the resale value of your home, especially in a depressed housing market when construction materials and labor costs remain stable as housing prices decline. In other cases, the cost to rebuild your home might be below its market value. The real estate value, after all, includes the land, which isn’t factored into the cost to replace the building.

Your insurance agent should be able to provide guidance on the appropriate coverage amount.

Many victims of disasters find out too late that their homes were underinsured. Among victims of the 2010 Fourmile Canyon wildfire near Boulder, Colo., 64 percent of homeowners reported being underinsured on their dwelling by an average of $200,000, according to a survey by United Policyholders, a consumer advocacy group.

See When your home’s market value is less than its insurance value.