[mullingitover]

> But the hard part is assessing "value"

Insurers have no problems assessing land value and have been doing it for centuries.

[dbcurtis]

Not so much. Insurers don't insure land. The insure property built on land, crops grown on land, and they insure against various kinds of liability. None of my dirt is insured.

[throwaway201103]

Insurers assess improvement value. Land is not insured, because it really can't be destroyed. If you house burns down, the land is still there. The only thing you lost is the house.

[mullingitover]

Exactly! So when you get a mortgage, you're paying for land plus house in the mortgage. Insurers have to know the value of the land alone so they can know the difference and insure just the house.

[paul_f]

Actually, no, they don't. Insurers make no valuation on the land, only on the improvements. There is no appraisal done when buying a homeowners or business insurance policy

[yellowapple]

> Insurers make no valuation on the land, only on the improvements

Well

    $PROPERTY_VALUE = $LAND_VALUE + $IMPROVEMENTS_VALUE

Which means

    $LAND_VALUE = $PROPERTY_VALUE - $IMPROVEMENTS_VALUE

$PROPERTY_VALUE is set by the market automatically, and we've already established that insurers are able to calculate $IMPROVEMENTS_VALUE, so - tada! - you've now got your $LAND_VALUE.

[mullingitover]

This still gives you something to work from, since the mortgage (or appraised value) - improvements = land value.