Property Valuation
A Minnesota appraiser needs to value a property that has suffered fire damage. For insurance purposes, the appraiser should provide which type of value?
AMarket value as-is
BReplacement cost new of the damaged improvements✓ Correct
CInvestment value to the current owner
DMarket value 'as if' the damage had not occurred
Explanation
For insurance purposes, the appraiser typically provides replacement cost new (RCN), which is the cost to rebuild the improvements at today's prices without deduction for depreciation. Insurance policies (particularly replacement cost policies) use RCN to determine coverage amounts and loss payments. Market value and insurance value serve different purposes and can differ significantly.
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