How much Home Insurance do I need?

What is dwelling coverage, and how much do I need?

Dwelling coverage is the part of a standard home insurance policy that typically pays when your home is damaged by hail, wind, fire, and other covered perils. How much do you need? You should have enough dwelling coverage to rebuild your house should it be destroyed by a covered peril.

How do I know how much dwelling coverage I need?

A licensed insurance agent is best qualified to make that determination, and that’s one of the first steps he or she will take when talking to you about coverage. However, you can estimate how much dwelling coverage you’ll need with our calculator. Simply enter your ZIP Code and the square footage of your home in the spaces below, then click on the Calculate button.

• Why we need your ZIP code. Our calculator uses the average building cost in your area to determine how much it would take to rebuild your home. The national average is $95.51 per square foot, but costs in your area could vary greatly from that amount.
• Why we need the square footage. The replacement cost for your home is calculated by multiplying the average building cost in your area by the square footage of your house. Remember, you don’t have to replace the land – it’s still there.
• Why we give you three numbers. The other variable in rebuilding your home is the amount of upgrades you’ve done. If you have mostly standard features, you should use the first estimate. If you’ve done some upgrades, such as adding granite countertops and hardwood floors, you should use the second figure. If you’ve made substantial upgrades, you should count on the third number being the most accurate.

What else dwelling coverage determines

Your dwelling coverage number is important because it helps set limits for many of the protections typically included in a standard home insurance policy. Here’s how:

• Other structures. This protects other buildings on your property, including detached sheds and garages. The coverage limit for this protection is usually 10% of your dwelling coverage. For example, if your dwelling coverage limit is $200,000, your other structures protection is capped at $20,000.
• Personal possessions/contents. This is what protects what’s in your house, including furniture, electronics, clothing, and everything else. The coverage limit for this protection is usually 50% to 70% of your dwelling coverage. For that $200,000 house, you’d have $100,000 to $140,000 of contents coverage. However, there are sub-limits for some high-value items such as jewelry and fur. Ask your agent whether you should schedule an endorsement to increase your coverage.
• Loss of use. This protection helps if your home deemed uninhabitable because of damage from a covered peril. It will assist with hotel, restaurant, and other bills while the home is repaired or replaced. The coverage limit is 20% of the dwelling coverage limit. For that $200,000 home, the limit would be $40,000. Sometimes, however, there also are time restrictions.

Now that you understand what dwelling coverage is and have your estimate of how much you need, you’re ready to get a free quote for home insurance coverage.