- Recommended dwelling cover
- $360,000
- Personal property (50%)
- $180,000
- Loss of use (20%)
- $72,000
- Suggested liability
- $300,000
- Estimated annual premium
- $1,512
- Estimated monthly cost
- $126.00
Your market value implies about $320,000 of insurable structure, which is $40,000 below the rebuild estimate. Insuring this home to market value could leave you short. Premium estimate uses ~$0.42 per $100 of dwelling cover, adjusted for deductible and policy form.
Rebuild cost versus market value
Market value includes the land, and land never burns down. Insurers only ever pay to rebuild the structure, so cover should sit close to the rebuild cost, not the sale price. In hot markets those numbers diverge wildly; in weak markets the reverse happens and people insure for more than the building could ever cost to replace.
How each limit is derived
Dwelling cover equals the rebuild estimate. Personal property is usually set at 50–70% of dwelling and loss-of-use at 20–30%, which cover living costs while the house is uninhabitable. Liability should start at $300,000 and rise with your net worth — the same logic as an umbrella policy.
Premium estimate
Premium starts from roughly $0.42 per $100 of dwelling cover per year and is adjusted for deductible and policy form. Real pricing varies enormously with construction type, roof age, wind or wildfire exposure, claims history and your credit-based insurance score.
Frequently asked questions
Why not just insure for what I paid for the house?
Because purchase price bundles land, location premium and market conditions, none of which affect what it costs to rebuild four walls and a roof.
What if rebuild costs jump after a disaster?
Labour and materials spike after widespread events. Many policies include extended replacement cost of 25 to 50 percent above the dwelling limit for exactly this reason — check whether yours does.
Do I need separate flood cover?
Standard home policies exclude flood. If you are in a mapped flood zone, or anywhere water has ever pooled, you need a separate policy either through the NFIP or a private carrier.