I am looking at purchasing a property as a personal residence plus basement apartment suite. The property is in a hot market (Toronto Junction area), current asking price is $350K. The home is also about 90 years old, typical for this area.

Upon discussion with insurance company, they indicated to me that the 'replacement cost' for this property (ie. if it burns down to the ground) would be about $230K. The 2005 assessed value of the property used for taxes is $293K. I do not understand why there is such a large discrepency in value. The home is clearly in a high demand area, which is experiencing further transitioning/gentrification, and will most likely be experiencing appreciation.

Does anyone have any insight into this? Can anyone recommend an insurance company that would offer a higher replacement cost and is willing to insure older homes?

Thanks!