How do I know I have enough insurance on my house? It's worth $450,000.

Why you can trust Insure.com

Quality Verified

At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain our editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria.

Forget real estate market value. Insurance value is all about construction costs.

In some cases the cost to rebuild might exceed the resale value of your home, especially in a depressed housing market when construction materials and labor costs remain stable as housing prices decline. In other cases, the cost to rebuild your home might be below its market value. The real estate value, after all, includes the land, which isn’t factored into the cost to replace the building.

Your insurance agent should be able to provide guidance on the appropriate coverage amount.

Many victims of disasters find out too late that their homes were underinsured. Among victims of the 2010 Fourmile Canyon wildfire near Boulder, Colo., 64 percent of homeowners reported being underinsured on their dwelling by an average of $200,000, according to a survey by United Policyholders, a consumer advocacy group.

See When your home’s market value is less than its insurance value.

How do I know if I have enough insurance on my house? It’s worth $450,000.

Related Articles