How Much Homeowners Insurance Do I Need?

  1. 1615 POINTS
    Ryan Andrew
    President, The Andrew Agency, Richmond, VA
    The amount of homeowners insurance you need depends on several factors. Homeowners insurance is not a one size fits all product. Your home should be insured for 100% of the Replacement Cost. Replacement Cost is not the purchase price or assessment value but rather the cost to rebuild your home. Once the Replacement Cost is determined most policies apply a percentage of the dwelling coverage for other coverages including personal property coverage (usually 70%) and other structures (usually 10%). Depending on the age of your home you should consider "law and ordnance" and "water/sewer backup" coverage.
    Answered on May 1, 2013
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  2. 130 POINTS
    Ray Jeffrey
    Insurance Agent, Liberty Mutual Insurance,
    The dwelling limit for your home should be equal to the amount that it will cost to rebuild your home. This is going to vary based on type of construction materials, current costs of materials, and labor costs. Most reputable agents will use a third party estimator which considers all of these factors to come up with a replacement cost number. You should never pick a replacement cost number out of thin air. Additionally, do not be surprised if the replacement estimate that you are given differs from the market value or the appraised value. You aren't insuring the dirt!
    Answered on May 1, 2013
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