What is insurance value

Simply put, it is the amount approximating the actual replacement cost of insured property. It is an important concept applied in insurance to ensure that an insurance policy adequately covers and protects the value of a property (ie, building) in the event of a partial or total loss.

What is meant by insurance value?

noun. : the value of property stated in an insurance contract indicating the limit of indemnity that will be paid at the time of loss.

What is the difference between value and insurance value?

Unlike market value, insurable value does not include the cost of acquiring a land, and is generally based on the amount required for purchasing building materials and hiring contractors to build a replacement. The replacement cost of a property can be calculated in several ways.

How do you calculate insurable value?

A total insurable value (TIV) is calculated by adding together the total physical property, equipment, inventory, tools, etc. at each location and combining it with the final number calculated on a fully completed business income worksheet.

What is the value of an insured loss?

The maximum amount an insurance company will pay if an insured asset is deemed a total loss. The asset's insured value can either be its replacement cost or its market value, depending on the insurance policy.