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February 2, 2023

How Much Home Insurance Do I Need?

Whether you’re purchasing a home or reviewing your current home insurance policy, you may wonder what policies you need to be adequately protected. Determining the correct amount of home insurance and the types of coverage you need depends on various factors, such as your home’s location, size, value, and construction materials.

What Does a Standard Home Insurance Policy Cover?

A standard home insurance policy includes the following:

  • Dwelling coverage pays to repair or rebuild your home if it’s damaged by a covered cause of loss. It’s important to buy enough dwelling coverage to cover the cost to rebuild, which will vary from house to house.
  • Other structures coverage covers damages to detached structures, such as garages, fences, and sheds.
  • Personal property coverage helps to insure personal items in your home that may be damaged or destroyed by a covered cause of loss. Personal property could include furniture, clothes, sports equipment, and electronics.
  • Loss of use coverage may pay additional housing and living expenses if you must temporarily move out of your home while it’s being restored.
  • Liability insurance is designed to protect your assets and cover your defense costs if there is a lawsuit because you or your family members are responsible for causing injuries or damage to other people or their property.

There are additional coverages available that go above and beyond these standard policies. If you want to protect valuables such as jewelry, electronics, artwork, or antiques, you may need to purchase supplemental insurance.

Do I Need Umbrella Insurance for My Home?

Another policy worth considering is umbrella insurance. Umbrella insurance helps protect your assets from liability claims made against you that exceed your liability limits. Umbrella insurance is often recommended to homeowners who own a dog, swimming pool, or trampoline.

How to Determine Home Insurance Coverage Limits

When determining your home insurance coverage limits, you should consider the following:

  • Rebuilding costs
    • To estimate this, multiply the total square footage of your home by local, per-square-foot building costs, and consult local real estate agents, builders associations, or insurance agents to find out typical construction costs.
    • Analyze your home for hard-to-replace features that may cost more to repair.
    • Account for rising costs of building materials.
  • The value of your belongings
    • Conduct a home inventory to accurately estimate the value of your possessions to ensure that you have enough coverage for replacements.
  • Liability insurance needs
    • Most homeowners insurance policies provide a minimum of $100,000 worth of liability insurance, but depending on their circumstances, it is often recommended that homeowners consider purchasing more.

These are just a few factors to consider when determining coverage limits. Finding a reliable insurance provider who can make the appropriate recommendations for your situation can also be beneficial.

Home Insurance Quote in Austin, TX

If you are interested in learning more about home insurance, contact Contigo Insurance Agency. We will help make sure you have the insurance coverage you need for your specific home.  click GET A QUOTE to get a policy designed for your needs.


This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.

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