Total Insurable Value
Categories: Company Valuation, Insurance
You have a house. You bought it last year for $422,500. She's worth a million bucks to you. You even named her Betty. When the insurance person asks for replacement cost, you quote the mil. But then she asks, "Um, really?"
You can imagine all kinds of fraud that could happen if people could insure things for waaaaay more than they're actually worth. Listen to that great Talking Heads song if you have any doubt. So there is a TIV, or Total Insurable Value, that comes with almost everything. Even Betty.
