Assessed Value

What Does Assessed Value Mean?

The assessed value of a property refers to its value as determined for tax purposes.

Government representatives evaluate and assign this value, which is often significantly lower than the property’s fair market value. Because assessed value is set for tax purposes rather than rebuild cost, homeowners sometimes use it as the wrong yardstick when deciding how much homeowners insurance they need.

Insuranceopedia Explains Assessed Value

Local governments employ assessors to determine the assessed value of properties to ensure fair tax collection. The assessment considers the property’s physical condition, the value of similar properties in the area, and applicable statutory laws. These figures can also differ from what insurers use to set premiums, which is why home insurance costs sometimes surprise buyers who only know their tax assessment.

These assessments can be challenged, and individuals have the right to request a reassessment of their property.