How Much Home Insurance Do I Really Need?
Most homeowners assume their home should be insured for whatever Zillow says it’s worth—but that’s not how insurance works. The key to proper protection is insuring your home for what it would cost to rebuild, not what you could sell it for.
1. Replacement Cost vs. Market Value
Replacement cost is how much it would cost to completely rebuild your home using similar materials and current labor prices.
Market value includes land, location, and market conditions—but land doesn’t burn down.
Example: Your home might have a market value of $800,000, but only require $500,000 to rebuild. Your insurance should be based on that $500K figure.
2. Factors That Affect Rebuild Cost
Square footage
Number of stories
Construction materials (tile vs. vinyl, wood vs. stucco)
Roof type and slope
Local building codes and labor rates
Your agent or carrier can run a replacement cost estimator to determine the appropriate amount.
3. Personal Property Coverage
This is usually a percentage of your dwelling coverage—often 50% to 70%. But if you have high-value items like jewelry, collectibles, or art, you may need to schedule those separately with a rider or floater policy.
4. Liability and Umbrella Coverage
Consider how much you have to protect. If someone sues you for an injury on your property, do you have enough liability coverage to shield your assets? Most policies come with $100K–$300K, but an umbrella policy can provide an extra $1M+ if needed.
5. Annual Policy Review
Reassess your policy whenever you:
Renovate your home
Buy expensive furniture or equipment
Add a pool, trampoline, or pet with bite risk
Start a home-based business
Conclusion / CTA
Insurance isn’t one-size-fits-all. Let our experts at Beyond Your Insurance help you find the right amount of coverage—so you’re not overpaying, or worse, underprotected.