Insurable Value


Insurance coverage generally does not include the value of the land, since even if there is a complete loss or destruction of the improvements, due to a wide range of hazards, the land is still available for reconstruction.


Thus, insurable value considers the replacement or reproduction cost of the physical improvements only.  When establishing coverage or in the event of a loss, an insurance company with an appraisal that formed an opinion of the "insurable value" would have a figure upon which to base a claim.


Appraisers often focus on the cost approach when completing insurable value assignments since the cost approach is based on the separate analysis of the site and the improvements which are then added together.  The sales approach considers the market value of similar sales, however the sales include both the improvements and the land.  Income approach analyses consider the income generating capacity of the entire subject property without consideration for land and improvement elements, and the approach employs capitalization rates established for properties that have their improvements and land working together.


Appraisal assignments that form an opinion of insurable value thus seek an entirely different value opinion from that typically sought by a market value appraisal.        


Contact us with your questions or concerns regarding insurable value or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be contacted via e-mailed at  



Copyright 2007 Horizon Village Realty & Appraisal

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.