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Homeowners Insurance Quotes - Replacement Value vs. Sale Price vs. Appraisal Value

First time homebuyer.

Working with a new insurance broker and have some questions.

Background info:

  • List price: $339k
  • Sale price: $362k
  • Appraisal value: $363k
  • Loan amount: $344k

The insurance broker gave me two different quotes: "As per our conversation, please see the attached quotes. I did a quote at replacement value, and a second on at the purchase price of the home."

Quote 1 ($77 / month)

  1. Dwelling coverage: $340k
  2. Other structures: $34k
  3. Personal property: $170k
  4. Additional living expenses: $68k
  5. Personal liability/medical payments: $300k/$1k

Quote 2 ($ 80 / month)

  1. Dwelling coverage: $363k
  2. Other structures: $36.3k
  3. Personal property: $181.5k
  4. Additional living expenses: $72.6k
  5. Personal liability/medical payments: $300k/$1k

This was from an email from my mortgage broker to insurance broker today: "Please provide a dec page w/coverage up to the loan amount or evidence of full replacement value."

Which quote should I go with and why? Why is the replacement value at $340k? That quote was given to me before appraisal report was finished. Would that value be affected by the appraisal report or does insurance company use their own calculation? Does the mortgage lender care that the replacement value on the quote is less than the loan amount?

It seems like a small difference in amounts ($3/month), so going with the higher one seems obvious from a CYA standpoint, but want to make sure I'm not messing this up and unnecessarily paying an extra $30-$40/year.

submitted by /u/learningtomoney30s
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source https://www.reddit.com/r/RealEstate/comments/vo24xg/homeowners_insurance_quotes_replacement_value_vs/
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