In real estate and insurance, Insurable Value refers to the amount for which a property is insured against loss or damage. It typically includes the value of the improvements, such as buildings and structures, but excludes the value of the land and other components that are not subject to physical destruction.
Insurable value is based on the cost to repair or replace the improvements, not the property’s market value. This distinction is important because land does not depreciate or suffer physical loss, and insurance coverage is intended to protect against damage to the structures only.
