Property records are not always up-to-date, but a huge discrepancy like that should not go unexplained. If the house truly has 1,648 sqft of actual living space (i.e., heated space), then your insurance should be based on the actual square footage. However, I would definitely ask more questions about the additional square footage. Is it all permitted space? Also, your financing will be based on the appraiser's value assessment. The appraiser compares the house you are buying to other homes that sold with similar square footage. If the the appraiser's measurement includes space that should not be included, the accuracy of the appraisal would also be affected. Last but not least, if you can't get this settled now and you buy the house, you'll have to answer the questions when you try to sell the house in the future.