Mississippi Property & Casualty Practice Exam

What term refers to the price at which property can be sold at the time of loss?

1. Market value

2. Insured value

3. Replacement cost

4. Appraised value

The correct answer is: Market value

Market value is the term that accurately describes the price at which property can be sold at the time of loss. This value reflects the current worth of the property based on supply and demand in the market at that specific time, considering factors such as location, condition, and market trends. Insured value refers to the amount that an insurance policy covers for the property but may not necessarily align with what the property could sell for in the open market during a loss event. Replacement cost pertains to the expense to replace the property with new items of like kind and quality, rather than reflecting its current market value. Appraised value refers to an estimate of the property’s worth as determined by a professional appraiser, which may not reflect real-time market conditions. Thus, market value provides the most accurate reflection of what one could expect to receive in a sale at the time of loss.