How much homeowners insurance do I need?
Insure your home for what it costs to rebuild — not what you paid. Here's how to size each coverage and what it runs in 2026.
The biggest homeowners insurance mistake is insuring your home for its market value instead of its rebuild cost — they're not the same. Here's how to size coverage so you're protected without overpaying.
The coverages that make up a policy
- Dwelling — enough to fully rebuild your home (not its sale price).
- Other structures — fences, sheds, detached garage (often a percentage of dwelling).
- Personal property — your belongings; consider replacement-cost coverage.
- Liability — protects your assets if someone is injured; many carry $300k–$500k or add an umbrella.
- Loss of use — living costs if a covered loss makes your home uninhabitable.
How to set your dwelling amount
Base dwelling coverage on local rebuild cost per square foot, not your mortgage or market value. Your agent or carrier can run a replacement-cost estimate. Underinsuring here is the costliest mistake after a major loss.
What it costs in 2026
Homeowners insurance averages roughly $2,000–$2,500 a year nationally (about $170–$210/month) for typical coverage, but ranges widely by state — coastal and wildfire-prone areas pay far more. Raising your deductible from $500 to $1,000 often trims 10–15% off the premium.
How to save without underinsuring
- Bundle home and auto.
- Raise your deductible if you can cover it.
- Add a newer roof, security and water-leak sensors.
- Compare carriers — premiums vary widely for the same home.
Frequently asked questions
Enough to completely rebuild your home at current local construction costs — which is based on rebuild cost, not market value or your mortgage balance. A replacement-cost estimate from your agent or carrier is the most reliable guide.
Nationally it averages roughly $2,000–$2,500 per year in 2026, but it varies a lot by state and risk. Coastal and wildfire areas cost more; comparing carriers is the best way to find your competitive price.
No — standard policies exclude flooding. You need separate flood insurance, which can be important even outside high-risk zones.
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