How Much Home Insurance Do You Really Need?

How Much Home Insurance Do You Really Need?

Having home insurance is a smart move — but overpaying for unnecessary coverage? Not so smart.

Let’s break down how much coverage you actually need, based on your home’s value, location, and risk.

🏠 What Does Home Insurance Cover?

• Dwelling coverage – protects the structure of your home
• Personal property – covers your belongings
• Liability protection – covers injury lawsuits
• Loss of use – pays for living elsewhere during repairs
• Medical payments – for injuries to guests on your property

📏 How to Calculate the Right Amount

✅ 1. Dwelling Coverage (Most Important)

Use the rebuild cost, not market price.

• Rebuild cost = square footage × local construction cost
• Example: 2,000 sq ft × $150 = $300,000

💡 Tip: Update this yearly, especially if construction prices rise.

✅ 2. Personal Property

Usually 50–70% of your dwelling coverage.

• $300,000 × 50% = $150,000 personal items coverage
• Take inventory: electronics, furniture, appliances, jewelry, etc.

✅ 3. Liability Coverage

Start with $300,000 minimum — more if you have a pool, pets, or rental guests.

🚧 What’s Often Underestimated?

• Natural disaster add-ons (floods, quakes) are not always included
• Valuables like jewelry, art, or collectibles may need separate riders
• Inflation protection can help your coverage stay up-to-date automatically

📊 Quick Coverage Checklist

Coverage Type	Recommended Minimum	Optional?
Dwelling	Rebuild Cost ($/sq ft × size)	No
Personal Property	50–70% of dwelling	No
Liability	$300,000–$500,000	No
Medical Payments	$1,000–$5,000	Yes
Loss of Use	20–30% of dwelling	Yes
Natural Disasters	Based on location	Yes
Inflation Protection	Auto-adjust yearly	Optional

🧮 Use Online Calculators

• Policygenius Home Insurance Calculator
• Hippo Coverage Estimator

📢 Don't guess — calculate. Underinsuring can cost thousands. Overinsuring wastes your money. Use rebuild cost, personal inventory, and location-specific risks to get it right.