How Much Homeowners Insurance Do I Need?

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Key Takeaways

How much insurance you need is based on many personal factors, like the age and location of your home, local construction costs and the value of your things.
Ultimately, you’ll want enough insurance to be fully covered against liability claims. You’ll also want enough coverage to pay for today’s repair or rebuilding costs if your home or things get damaged.
There are ways you can increase the confidence in your homeowners insurance coverage amounts, like creating a home inventory or knowing how to estimate your home’s replacement cost.

What Is the Right Amount of Homeowners Insurance?

Your homeowners insurance policy should be tailored to you and regularly reviewed. The coverage you need is different than your neighbor’s, and the amount you initially choose is likely to change over the years, too.

Let’s say it will cost you $400,000 to rebuild your home today if it gets destroyed. Your insurance policy only covers up to $300,000 worth of damage, because that’s what it would’ve cost when you bought your policy. That means you'd need to pay out of pocket for the remaining $100,000. So, it’s important to review your home insurance policy on a regular basis to ensure you’re fully protected.

At The Hartford, we’re here to answer any questions you may have, so you can enjoy peace of mind knowing you’re protected. Get a homeowners insurance quote today or call a representative at 877-422-2345 to learn more.

happy woman researching how much home insurance do i need

Things To Consider When Buying Homeowners Insurance

There are various factors to consider when deciding how much coverage you need from your homeowners insurance policy, such as:

Your home’s structure, size and age
Any special features or materials in your home
The value of your belongings
The cost of living expenses
Local construction rates

You can start by asking yourself:

Does Your Home Have Special Features?

Take note of whether your home contains unique characteristics or features that can make it more costly to rebuild. Common examples would be special moldings and hand carvings, or unique building materials like plaster or rockwork.

Is Your House Up to Code?

Building codes and regulations are updated all the time, and they can vary based on location. If you live in an older home, it’s possible the codes and regulations have changed since it was built. If your house needs to be rebuilt after a covered event, your homeowners insurance policy will help cover the additional costs to bring it up to code.

woman planning renovation knowing home insurance coverage limits

The Hartford automatically provides ordinance or law coverage at 10% of your dwelling limit. So, if your stairs are too steep to meet code and you need an architect to redesign your space, your ordinance or law coverage can help cover the extra costs to do it. This limit may be increased by additional endorsements to extend your protection.

Have You Done a Home Inventory?

It’s important to create a home inventory in case disaster strikes. This inventory list should include everything inside your home to help you figure out what needs to be repaired or replaced.

If you have an accurate and up-to-date home inventory, it could help get your claims settled faster, verify any losses for income tax returns and figure out how much homeowners insurance coverage you need.

Do You Have Enough Coverage?

If you’re asking, “What home insurance coverage do I need?” rest assured that at The Hartford, our policies come with customizable coverage options to help keep you, your home and your visitors safe.

For example, personal liability insurance coverage helps protect you if:

Someone who doesn’t live with you is injured while on your property
You’re found liable for damaging someone else’s property
You’re found responsible for injuring someone or damaging their property while you’re away from your home

Typical limits usually start around $100,000, but it could be a good idea to set your limit high enough to cover your assets at a minimum. This is especially true if you have a pool, for example.

How Much Home Insurance Do I Need To Rebuild My Home?

Before you can determine how much insurance you’ll need to fully protect your home, you’ll first want to understand what is and isn’t covered in a standard homeowners insurance policy.

Homeowners insurance typically covers damage caused by fire, lightning and explosions. These types of covered events are called “perils.” More specifically, an “open peril” policy is when your policy lists all the risks it doesn’t cover. A “named peril” home insurance policy will explicitly list every risk it does cover.

In most cases, homeowners insurance policies can help protect your home if:

It’s destroyed by a fire.
A tree falls during a storm and damages the roof.
Someone crashes into your fence.

But homeowners insurance policies don’t protect your home from every peril. For instance, damage caused by floods or earthquakes aren’t generally covered by a homeowners insurance policy. But rest assured, there are ways to broaden your coverage. For example, you can get a separate flood insurance policy through the National Flood Insurance Program.***

Tip:

To make sure you’re protected if disaster strikes, check your policy to see what is covered and what the limits are. Remember: if the total cost to rebuild your home is higher than your homeowners insurance policy limits, you’ll have to pay the difference.

For over 40 years, AARP^® Home Insurance from The Hartford¹ has protected AARP members and their homes. Common coverages include:

Dwelling Insurance Coverage

Dwelling insurance coverage helps pay to repair or rebuild the structure of your home and the structures attached to it, such as roofs. It also includes internal systems like wiring and plumbing, plus heating and air conditioning.

Other Structures Insurance Coverage

This helps cover structures on your property that aren’t attached to your house. For example, if your shed collapses from heavy snow, other structures coverage can help cover the cost of damages.

Personal Property Insurance Coverage

Personal property coverage helps cover your costs to fix or replace damaged belongings, such as furniture, clothing and appliances, from a covered loss.

Loss of Use Coverage

This coverage helps pay your living expenses, up to policy limits, if you cannot live in your home due to a covered loss or after suffering a loss. So, if your house is damaged from a fire and needs repairs, this coverage helps cover the costs to stay in a hotel or rental.

Personal Liability Coverage

If someone who doesn’t live with you suffers an injury or property damage for which you are legally responsible, personal liability can help cover your legal defense costs and any court judgments against you, up to your policy limits.

Medical Payments Coverage

Medical payments coverage helps pay emergency medical bills if someone who doesn’t live with you is injured on your property. It also covers injuries caused by your family member or pet, regardless of where it happens. Bills are paid, up to policy limits, whether you’re legally responsible or not.²

How Do I Determine the Replacement Cost of My Home?

With today’s rising costs and inflation, protecting yourself from financial risks is key. It’s important to regularly check your home insurance coverage limits to ensure they reflect the amount it would cost to rebuild your home today.

Tip:

Construction costs fluctuate, and if your policy doesn’t adjust with inflation, you might not have enough coverage when you need it most. Some insurers offer an inflation guard clause, which automatically increases your coverage limits over time. Check to see if your coverage adjusts to keep up with the rising costs of construction.

Your home insurance limits should be reviewed regularly to ensure they provide more than just rebuilding cost protection. Beyond repairing your home, you’ll want to make sure you have enough coverage for personal property losses, liability protection and additional living expenses if you’re ever displaced due to a covered event.

To get an accurate estimate for how much your home will cost to rebuild, consider working with a licensed appraiser. An appraiser will not only inspect your home but will look at local construction and labor costs to give you an accurate rebuilding estimate. They will also note any unique characteristics of your home, such as custom pieces or special materials, and factor that into the rebuilding estimate.

Tip:

To DIY a rebuilding estimate, the Insurance Information Institute recommends multiplying the total square footage of your home by the per-square-foot construction cost in your area.** So, if your house is 1,700 square feet and the local construction costs are $150 per square foot, you may need at least $255,000 in coverage.

Get the Coverage You Need With The Hartford

The Hartford is an insurance company you can trust. For over 200 years, we’ve been helping individuals get personalized protection at a price that fits their budget. Get a homeowners insurance quote today or call a representative at 877-422-2345.

Frequently Asked Questions About Homeowners Insurance Coverage Needs

What Is the Proper Amount of Home Insurance?

The Hartford can help if you’re wondering, “How much homeowners insurance do I need?” Calculators and other generic tools can sometimes be useful, but when it comes to home insurance, there is no universal standard. How much insurance you need to protect your home and assets depends on many factors unique to you. Ultimately, you will want to have enough to cover the cost to repair or even fully rebuild your home if disaster strikes.

What Is the Rule of Thumb for Homeowners Insurance Coverage?

Generally, a good rule of thumb is to have enough home insurance coverage to fully cover the cost to repair or replace your home in today’s market. It also makes sense to have enough liability coverage to protect your total net worth.

How Would a Homeowner Know How Much Insurance Coverage They Would Need?

Are you wondering, “How much home insurance coverage do I need to protect my home and belongings?” One way to determine the right coverage amount is to create a home inventory. This list should include everything inside and outside your home to help you figure out what needs to be repaired or replaced.

What Is the 80% Rule in Homeowners Insurance?

Generally, the 80% rule means you should have your replacement cost set to at least 80% of your home’s total value. Otherwise, you’re at risk of being underinsured if something happens to your home. To protect against this, The Hartford requires all homes to be insured to 100% of their rebuilding cost.

How Much Is Homeowners Insurance?

According to 2025 rates, the average cost of homeowners insurance in the United States is $2,242 per year, or about $187 per month.3 But, it’s important to remember that home insurance rates are based on many different factors, and the cost of your homeowners insurance policy will be specific to you.

For example, you could pay more if your home is older because rebuilding your home may be more costly. However, if your home is near a fire department or emergency response services, your homeowners insurance rate may be lower.