What is defined as the cost to rebuild a property based on current material and labor costs?

The cost to rebuild a property based on current material and labor costs is referred to as Replacement Costs. This figure reflects the amount that would be needed to replace the structure with a new one of similar kind and quality, without taking into account any depreciation. Replacement costs are crucial for insurance purposes, as they help determine how much coverage is necessary to fully restore a property in the event of a loss.

Market Value, on the other hand, refers to the price a property could sell for on the open market, which may be influenced by factors such as location and demand rather than the direct costs of rebuilding. Appraised Value is the value determined by a professional appraiser and can be based on a variety of factors, including market conditions and the condition of the property, but is not strictly tied to current labor and material costs. Depreciated Value refers to the decrease in value of a property over time due to wear and tear, obsolescence, or other factors, and is not a measurement related to the cost of rebuilding the property itself.