If you need home insurance, you may wonder how much coverage is required. This depends on your situation. Here are some guidelines to help you come up with a figure you can use when getting quotes.

First, what does home owner insurance cover? Typically, your policy will cover the following:

Your primary dwelling; the actual structure of your home.

Your personal possessions.

Your liability to others.

Living expenses if you can't live in your home.

Now, the amount of coverage provided for living expenses is usually set by the company. However, you may be able to get additional coverage. Liability coverage usually comes with a minimum amount, say $100,000, and you can request higher amounts. You could even get an umbrella policy which is a separate policy that provides even more coverage against liability. The reason it's recommended to get higher limits on liability is to protect your assets against a lawsuit. You'll need to determine for your situation, what limits you feel comfortable with.

For your primary dwelling, you are covering the cost of reconstruction. This is most likely not the price you paid for the home for a couple of reasons. The home value may have changed, and the price you paid probably included the land value as well. Homeowners insurance is for the structure only, not the land it sits on.

You can quickly estimate how much it would cost to rebuild your home by multiplying the square footage by local building costs-per-square-foot. You can call a local real estate agent or home builders association and ask for this information.

Personal possessions coverage is usually set at a percentage of your dwelling coverage such as 50 to 70 percent. If you feel this is not enough, you can ask for higher limits. For really expensive items such as jewelry, you may need to a special floater or endorsement that insures those items separately (for a premium).

If you already have a homeowners insurance policy, you can use your existing coverages to get quotes. When you shop for quotes, you want to get at least three because rates vary quite a bit from company to company. A convenient way to get quotes is to go online to a comparison site. Then you only need to enter your information once to get several quotes back.

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