Scenario: "Is there a way to find out how much home insurance I would need? I am buying a home and am looking around for insurance quotes. I have several companies offering me different quotes, but I am not sure how much I should invest for a home insurance policy." - Adam Jefferson

Suggestion: How much home insurance you must buy depends on a lot of factors. When you buy insurance for your home, you must have a policy that covers the following basic things:

1. The structure of your home: You must have enough insurance that would cover the cost of rebuilding your home. Some banks may also require you to cover the amount of mortgage you have on your home. Damage from disasters like fire, hail, lightning, theft and explosion should be covered by a standard policy. You may look for online insurance quote for your home and make sure you get coverage for these. For flood and earthquake, you shall need separate coverage.

2. Your personal belongings: Standard homeowners policies cover your personal belongings for approximately 50% - 70% of the insurance you have on the structure of your house. Check the declarations page to see how much your insurer covers. You must have an inventory to be able to determine whether your coverage is enough to replace all those items in the list in the event that they are stolen or destroyed. Generally, replacement costs are approximately 10% more than the actual cash value.

3. Your liability towards others: Accidents happen and it is not unlikely that you or your family member may cause any bodily injury or property damage to other people. The liability portion of your policy should cover you against lawsuits (if any) arising from such accidents. You will be covered both for defending yourself in court and also to compensate any loss that the court deems necessary.

4. Additional living expenditure: In the event that your home is damaged and you need to relocate (temporarily) to a different location during repair, your home insurance should cover any additional expenditure. This coverage may differ from one company to another. When you ask for online insurance quote for your home, you may find that it varies from one company to another. Many companies offer about 20% of the insurance on your house towards additional living expenditure and many who offer an unlimited amount of coverage for loss of use for a fixed amount of time. This should also cover any rental income that you would receive from your tenants had your home not been destroyed.

For any additional coverage, you may get umbrella policies from your insurer. Make sure you know what you want to be covered for before you ask for a quote. You may also check with your insurer as to what umbrella policies he might be able to offer you. Buy insurance after you have assessed everything. Make sure you have enough coverage – no more no less. Although it is hard to recover from a disaster mentally, it is of great help if at least you are financially supported. So, when you ask for online insurance quotes, make sure you have all of these in mind.

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