Important Points for IC 57 - Fire and Consequential Loss Insurance Exam
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Value may be defined as the worth of anything in terms of something else for which it can be exchanged either in other goods or in money.
There are two kinds of value: i. Value in use and ii. Value in exchange
Value in use is usually measured by the cost of replacing the property less depreciation. This cost is usually a matter of opinion.
Value in exchange is determined by what a buyer will pay for the property or by what it would cost to buy similar property at the place and at the price ruling at the time (market value).
The term ?Market Value?, in insurance practice, has different meanings in different situations but the objective in all cases is to give effect to the principle of indemnity in a practical manner.
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