What Does Insurable Value Mean?
Insurable value is the value of a property that an insurer is willing to provide insurance for. This term is common in property insurance.
If a house is appraised to be worth $200,000, then its insurable value would be $200,000. This means that a policyholder would be covered for up to $200,000 worth of losses to the house.
Insuranceopedia Explains Insurable Value
One important thing to keep in mind is that land value is often excluded in calculations of insurable value. This is because land typically does not experience losses, but just stays there indefinitely. So, many insurance policies exclude land from coverage.
The insurable value for homes and other buildings can be subject to many different variables, such as market swings, levels of criminal activity in the neighborhood, and the size of the structure.