What is the typical relationship between insurance value and market value?

Insurance value typically reflects the cost to replace a property in the event of a total loss, generally determined by factors such as construction costs and the value of materials. This amount is often less than market value, which considers the property's actual sale price based on buyer demand, location, and other economic factors.

Market value can include elements like location desirability, the current real estate market conditions, and enhancements made to the property, which can drive the price higher than the insurance value. Therefore, the correct relationship is that insurance value is generally less than market value because it is more related to restoring the property rather than its overall worth in a competitive market context.