Exactly! So when you get a mortgage, you're paying for land plus house in the mortgage. Insurers have to know the value of the land alone so they can know the difference and insure just the house.
Actually, no, they don't. Insurers make no valuation on the land, only on the improvements. There is no appraisal done when buying a homeowners or business insurance policy
$PROPERTY_VALUE is set by the market automatically, and we've already established that insurers are able to calculate $IMPROVEMENTS_VALUE, so - tada! - you've now got your $LAND_VALUE.
