Why is the value of the lot left out when an agent sets the amount of insurance on a house?
Explanation
Insurable value is the cost to replace the structure, and the lot survives the fire that destroys the house, so there is no loss on the land to indemnify. That is why a purchase price and an insurable value rarely match: market value bundles in the land and the neighborhood, while insurable value does not. No property policy issues separate land coverage, and the mortgage clause protects a lender's financial interest rather than the ground itself.
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