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.