Re: Homeowners insurance question
As I understand it "fair market value" is the price someone would be willing to pay for a house such as yours. For example, you may consider the value of your home to be $200,000 but the insurance company may say it's only worth $175,000 based on similar properties as yours. Therefore, you would make up the difference between the two values should your home need to be replaced.
"Replacement value" is the cost of replacing the property with similar property. That's my understanding, however I am not an insurance agent.
It really would be best to consult an agent, especially your own, as policies can vary in their definitions from one company to another.
Good luck!
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