My 4 bedroom house in Oakland had a replacement cost/value of about $400k. That seemed high but not unreasonable. Then the Santa Rosa fire burned down 1000 homes and insurers realized that construction costs in California are insane (especially when you are trying to build a thousand in a year). Replacement cost jumped to $750k in one year. The land used to be worth quite a good fraction of the property, and then it wasn't.
My home’s replacement cost is way higher than what the insurer appraised it as, but asking for a higher appraisal counts as warning bells in their eyes (are they planning on burning down their home?).
