You should estimate the replacement cost for your home - your insurance advisor should be able to do this for you at ease based on your property description and general details. This would take into account the cost of materials and labor to rebuild your home back to the same position that you were at before.
It is always suggested that you insure your home at a minimum at replacement cost, if not more depending on improvements/betterments made to the home.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
The amount of coverage on a homeowner’s policy is prescribed by the lender in the majority of cases. As long as the market conditions are lower than the cost of rebuilding that works well. However, when housing prices rise, lenders often want more coverage than necessary to replace the house. In California the lenders are not allowed to demand more than the amount necessary to reconstruct the home. Your agent can provide all the information that you require.
That is a great question! Your question is a really good one, as it really speaks to the balance of affordability and adequately covered. Your insurer will have a program that estimates the value of your belongings. If you own an expensive collection, or have high end electronics or jewelry, that value may not be covered. Take some time and research what the value of those items are, if that is the case for you. Find out what it would cost to replace it, or if you have the receipts, what you paid. Contact some local builders, and find out what it would cost to build a home like yours Do not include the cost of the land, unless it's landscaped, or forested). Compare those amounts with what you have for your coverage. If the opposite is true, and you haven't got a lot of stuff, go low, and increase your coverage as you add to your belongings. I hope that helps - thanks for asking!
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It is always suggested that you insure your home at a minimum at replacement cost, if not more depending on improvements/betterments made to the home.