[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.