The value of a property or item before a fire, is usually more than $0. It will be the price a willing buyer would pay, and the seller would accept. For small items, think more like pricing items for a garage sale.

The value of a property or item after the fire is usually $0 if the item was no longer usable for it's intended purpose.

However, that's not true for real estate. Here's why.

When your rental property burns to the ground and is declared a total loss by the insurance company, then it is a total loss for the insurance company. But it's not a total loss for you. You still have the land and that land still retains it's value. The insurance company has only insured the structure; not the land. So if the house burns to the ground, from the insurance company's perspective, it's a total loss "for them". You don't lose a penny of value in the land.