How Much You Need

The amount of insurance you need depends on a lot of things, but in general, you need enough insurance to cover a hundred percent of the replacement of your house, coverage for the contents of your house, the cost of living somewhere else while your house is being repaired, and the cost of your liability to others. The cost of replacing your house is not the same as the amount that you paid for it; neither is it the market value of the property. Rather, it is the current cost of rebuilding the structure.

Coverage for the contents of your house or your personal property includes mostly furniture, but there are some policies that cover jewelry, electronic equipment and other valuables up to a particular value. You may want to do an inventory of your belongings so that you will have an idea of how much they are worth. Coverage for the cost of living somewhere else during rebuilding must cover the cost of meals, house rental or hotel bills and other living expenses. The need for coverage for your liability to others is very important in case someone is hurt within your property.