Yes, because it costs more to rebuild a home after a disaster when supply chains are strained and materials are even more expensive due to demand. But market value is not replacement cost. Just because a 1,200 square foot house costs $1M in Los Angeles doesn't mean the insurance is paying $1M to rebuild that house. They're only paying what it costs to rebuild it...not reBUY it. I do this and see this all the time. House in Austin sells for $1M and I am only insuring it for $280,000 or something. It can be rebuilt for less than $1M because if the home burns down the land is still there.