Dwelling: rebuild cost, not market value
Your dwelling limit should cover the cost to rebuild your home with similar materials at today’s construction prices. That can be higher or lower than its market value, which includes the land. Insurers estimate rebuild cost from your home’s size, age and features — review it, especially after renovations.
Extended or guaranteed replacement cost adds a cushion if rebuilding costs jump after a disaster, and an inflation guard raises your limit each year.
Personal property
Policies often set belongings coverage as a percentage of the dwelling limit. Make a home inventory to check it’s enough, and add scheduled coverage for jewelry, art or collectibles above the policy’s special limits.
Liability
Liability limits commonly start around $100,000, but many homeowners choose $300,000 to $500,000 to protect their savings. An umbrella policy adds more on top of home and auto.
Deductibles
A higher deductible lowers your premium. In some coastal and storm-prone areas, wind or hurricane damage has a separate deductible set as a percentage of your dwelling limit — check yours.
Frequently asked questions
Should I insure my home for what I paid for it?
Not necessarily. Purchase price includes land and market conditions; insure for the cost to rebuild the structure.
What is a percentage deductible?
A deductible set as a share of your dwelling limit — for example 2% of $400,000 is $8,000 — common for wind and hurricane damage in some states.
This guide is general information, not insurance or legal advice. Coverage and requirements vary by insurer and state.