What Does Fair Market Value (FMV) Mean?
Fair market value is the price of a product or a property when the concerned parties are not pressured to buy or sell and are given ample time to conclude a transaction that is agreeable to all involved. It is also the basis for taxation and court evaluation.
Insuranceopedia Explains Fair Market Value (FMV)
The fair market value of an insurance can be arrived at by comparing similar policies with almost the same benefits from different companies. By adding all the prices of the policies and dividing them by the total number of policies, the average yields the fair market value.
The fair market value of a property can also be a basis for the following: deciding how much property insurance to buy (from the insured's perspective) and how much money to give as a claim (from the insurer's perspective).