Insurance in a rising market

Just wondering what others do about insurance versus market value.

I bought a property a couple of years ago for $396k and insured it for what I thought it would cost to replace at $300k.
It's now worth $550k and obviously replacement cost would've risen significantly as well.
Interested to hear what you would insure for?
Was thinking $550k less land value of $150k so $400k

Is this realistic or should I be insuring for more to be safe?

Thks

Wilko

 

Insuring is about construction construction, which may or may not be related to market value?

 

Insured value should have nothing to do with the actual value- it's relevant to the replacement cost of the building and other constructed improvements on the property.

The hard part is trying to get an estimate from anyone- why would a builder waste their time right? It's a real risk too, because Insurers could accuse you of under-insuring when it comes time to claim OR you could be paying too much unnecessarily.

Ultimately, 99% of people take an educated guess. $300,000 should cover most lowset properties including demolishing- but if it was big, hightset, pool and shed, retaining, etc, all that throws extra cost in. You should get professional advice to come to an accurate figure.