You don't have to replace the real estate; so that part of the cost
doesn't need additional insurance.

If your house itself actually has risen in replacement cost, insurance
companies are happy to insure it for more; the more they insure, the
happier they are.

They just don't want to insure it for more than it's worth, because
it encounters a moral hazard, namely people making money by setting
fire to their house; which raises the odds against them enough for them
to notice on the bottom line. They want to be sure you can sell it
for more than you're insuring it for, so you sell rather than burning.
--
Ron Hardin


On the internet, nobody knows you're a jerk.