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Business Definition for: assessed value
Dictionary of Accounting Terms
assessed value

value established by a government for real estate or other property as a basis for levying taxes. For example, an individual receives a statement that, in the judgment of the local tax assessor, the individual's property is worth $50,000. If by law properties in this jurisdiction are assessed at 80% of market value, the individual's assessed value then is $40,000 (80% of $50,000), and property taxes will be based on this assessed value.

Dictionary of Insurance Terms
assessed value

monetary worth of real or personal property as a basis for its taxation. This value, established by a government agency, is rarely used as a means to determine indemnification of an insured for property damage or destruction.

See also replacement cost less physical depreciation and obsolescence , indemnity
Related Terms:
replacement cost less physical depreciation and obsolescence

sum it takes to replace an insured's damaged or destroyed property with one of like kind and quality, equivalent to the actual cash value, minus physical depreciation (fair wear and tear) and obsolescence. The objective is to place the insured in the same financial position after a loss as prior to it; the insured should not profit or lose by incurring a loss.

indemnity

compensation for loss. In a property and casualty contract, the objective is to restore an insured to the same financial position after the loss that he or she was in prior to the loss. But the insured should not be able to profit by damage or destruction of property, nor should the insured be in a worse financial position after a loss.

In life insurance the situation is totally different. By the payment of a single premium, the beneficiary of an insured can be placed in a much better financial position at the death of an insured than he or she was in prior to the death. However, the payment of a predetermined amount upon the insured's death does not make a life insurance policy a contract of indemnity.

In hospital indemnity and other health insurance plans, coordination of benefits is designed so that the insured cannot profit from an illness.

Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.
 Copyright © 2000, 1995, 1991, 1987 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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