Market Value

Published: | Updated: September 8, 2017

Definition - What does Market Value mean?

Market value, in the context of insurance, is the price an insured asset in its current state would be able to command in a competitive market setting from a willing buyer. It differs from replacement cost, actual cash value, trade-in value, and other forms of valuation.

Market value may also be known as open market value or fair market value, although the terms may have slight distinctions in different contexts.

Insuranceopedia explains Market Value

Market value helps determines the amount of necessary coverage for the appropriate property insurance, and the valuation factors into the premium cost as well. More often than not, it costs less than agreed value policies. However, in the event of a loss, what the insurer pays may differ from the market value stipulated in the policy. This is because property can depreciate over time. Thus, market value isn't a fixed figure, and it depends upon the current market and industry guidelines. Those with this type of insurance coverage may want to properly care for and maintain their covered property to retain resale value and thus ensure a higher market value in case of a loss.

How Well Do You Know Your Life Insurance?

The more you know about life insurance, the better prepared you are to find the best coverage for you.

Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.

Share this: