Coverage guide
How much homeowners insurance do I need?
Short answer: enough to rebuild your home at today's construction costs, plus 50–75% of that for personal property, $300k+ in liability, and a wind/hail deductible you can actually afford. Here's how to size each one.
The 6 coverages on every policy
Coverage A — Dwelling
Target: 100% of current local rebuild cost
Not market value, not purchase price — what it would cost a builder today to rebuild your home from scratch at current material and labor rates. Most homeowners are 10–25% short here because rebuild costs jumped after 2020 and limits weren't updated.
Coverage B — Other Structures
Target: 10% of dwelling (default), raise if needed
Detached garage, fence, shed, pool. Default is usually 10% of Coverage A. If you have a large detached structure, raise it.
Coverage C — Personal Property
Target: 50–75% of dwelling
Furniture, clothes, electronics, kitchenware. Walk through each room and estimate replacement cost. Watch for sub-limits on jewelry ($1,500 typical), firearms, electronics, and cash.
Coverage D — Loss of Use
Target: 20–30% of dwelling
Pays for hotel, meals, and rent if your home is uninhabitable during repairs. Most policies include this; check that the limit is at least 20%.
Coverage E — Personal Liability
Target: $300,000 minimum, $500k preferred
Covers you if someone is injured on your property or you're sued. $100k default is dangerously low. Pair with a $1M umbrella policy ($150–$300/year) if you have meaningful assets.
Coverage F — Medical Payments
Target: $5,000
No-fault medical coverage for guests injured on your property. Cheap to raise from the $1,000 default.
The dwelling-coverage trap
The most expensive mistake homeowners make is confusing market value with rebuild cost. Market value includes land, location, and demand. Rebuild cost is just labor + materials to put your house back exactly as it was.
In some markets rebuild is lower than market value (you don't need to insure the land); in others it's higher (a 1920s craftsman costs more to rebuild than a similar new build). Either way, your dwelling limit needs to track rebuild, not the Zillow estimate.
Construction costs jumped 35–45% from 2020 to 2024 in most U.S. markets. If your dwelling limit hasn't been bumped since then, there's a real chance you're underinsured by tens of thousands of dollars.
Endorsements worth adding
- Water backup — sewer/sump-pump backup; ~$50–$100/yr for $5k–$25k of coverage
- Replacement-cost roof — pays new, not depreciated; critical if your roof is 10+ years old
- Ordinance & law — covers code-upgrade costs after a major loss
- Service line — covers underground water, sewer, and electrical lines on your property
- Scheduled personal property — closes sub-limits on jewelry, art, firearms
- Umbrella policy — $1M+ extra liability for ~$200/year
Frequently asked
How much homeowners insurance do I need?
Enough dwelling coverage to fully rebuild your home at current local construction costs, plus 50–75% of that for personal property, $300k+ in liability, and a 1–5% wind/hail deductible you can actually afford to pay out of pocket. Most homeowners need a higher dwelling limit than they think.
How much homeowners insurance do I need on a $400,000 house?
If $400,000 is the rebuild cost (not market value), you need $400k in dwelling coverage. If $400k is the purchase price and the rebuild is $320k, you only need $320k. Look at the rebuild cost in your declarations page or get a quick rebuild estimate from your carrier.
How much liability insurance do I need on homeowners?
$300,000 is the practical minimum, $500,000 is better, and pairing $500k home liability with a $1M umbrella policy is the standard playbook for homeowners with meaningful assets, a pool, a dog, or teen drivers.
How much dwelling coverage do I need?
100% of current local rebuild cost. The fastest sanity check: take your home's square footage and multiply by the current rebuild cost per square foot in your area (often $200–$400 in 2026). Compare to your Coverage A limit. If you're 10%+ short, raise it.
How do I know if I'm underinsured?
Three quick checks: (1) is your dwelling limit at or above current rebuild cost? (2) is your liability $300k or higher? (3) is your roof on replacement-cost coverage, not actual cash value? Fail any one and you're likely underinsured. Upload your declarations page and we'll tell you in 60 seconds.
Stop guessing — review your actual policy
Upload your declarations page. We'll compare your limits against current local rebuild costs and standard endorsements, and tell you exactly where you're under- or over-insured.
Related reading
General information, not legal or financial advice. Coverage and limits vary by carrier and state.