How Much Homeowners Insurance Do I Need?
Don't insure for your home's market value—insure for what it would cost to rebuild. Get personalized dwelling, personal property, and liability recommendations in 30 seconds.
Your Home Details
Understanding Homeowners Coverage
Coverage A: Dwelling
Covers the structure of your home. Should equal your rebuild cost, NOT your home's market value (land doesn't burn).
Coverage C: Personal Property
Covers your belongings—furniture, electronics, clothes. Typically 50-70% of your dwelling coverage.
Coverage E: Liability
Protects you if someone is injured on your property. Should match or exceed your net worth.
Coverage B & D
Other structures (garage, shed) and additional living expenses if you can't live in your home.
Frequently Asked Questions
Why shouldn't I insure for my home's market value?
Market value includes land, which can't be destroyed by fire or other covered perils. Dwelling coverage should be based on rebuild cost—what it would take to reconstruct your home from scratch at today's construction costs.
What is replacement cost vs. actual cash value?
Replacement cost pays to replace items at today's prices. Actual cash value pays replacement minus depreciation (so your 5-year-old TV is worth less). Always choose replacement cost if available—ACV can leave you significantly underinsured.
Do I need flood or earthquake insurance?
Standard homeowners policies do NOT cover floods or earthquakes. If you're in a flood zone, you may be required to have flood insurance. Earthquake coverage is especially important in California and other seismic areas. Both are purchased separately.
What's an umbrella policy?
An umbrella policy provides additional liability coverage beyond your homeowners and auto policies. If you have significant assets (over $500K net worth), an umbrella policy is relatively cheap protection against catastrophic lawsuits.
Should I raise my deductible to save money?
If you have adequate emergency savings ($2,500+), raising your deductible from $1,000 to $2,500 can save 10-20% on premiums. Just make sure you could cover the higher out-of-pocket cost if you need to file a claim.