valuation
insurable value
Insurable value is the amount of a property that can be covered by a hazard insurance policy, generally based on the cost to replace or rebuild the improvements. Because land is not destroyed by fire or other covered perils, land value is normally excluded. As a result, insurable value can be higher or lower than market value. Insurers and appraisers estimate it using construction costs.
- Exam tip
- Insurable value focuses on the improvements, not the land. Expect a question contrasting it with market value or assessed value.
- Example
- A home sells for $500,000, including a $150,000 lot. Its insurable value is based on rebuilding the $350,000 structure, not the land.
Related terms & state variants
Sources
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Last verified: 2026-10-23