Market Value
The price a property would sell for on the open market, based on location, land value, and current real estate conditions.
Detailed Explanation
Market value differs from replacement cost, which is the amount needed to rebuild a home. Insurance coverage should be based on replacement cost, not market value, as land value is included in market value but doesn't need to be insured against damage.
Practical Example
Though Sarah's house had a market value of $450,000, her insurance agent explained she only needed $300,000 in dwelling coverage because that would cover the cost to rebuild the structure—the land value making up the difference wouldn't be damaged by fire or other insured perils.
Frequently Asked Questions
Related Terms
Need Insurance Coverage?
Request quotes from top insurance providers and find the best coverage for your needs.
Get Free Quotes