How Much Home Insurance Do I Need?

You only think you need more home insurance coverage when something happens. But to prepare for anything –and hopefully it’s nothing– how do you answer the question How much home insurance coverage do I need for yourself?  Knowing comes down to the specific situation and home of the individual. What you need is really what you need. Not what you should have because it was useful for someone else.

Here we answer your questions of “how much insurance do I need for my home?” and “how much home contents home insurance do I need?” Both of these questions will be answered as well as more on types of coverage and liabilities to consider when looking for home insurance.

How Much Home Insurance Coverage Do I Need?

The types of coverage you’ll need for home insurance are four-fold: insurance for the structure of your home, contents, liability, and additional living expenses. We’ll take a look at each of these types of insurance, what they cover, and how to determine how much to include in your policy for each.

For more information about these coverages and their cost in Winnipeg, read this article.

Insurance for the Structure of Your Home

This is usually called home insurance on insurance websites because it’s the basic level of insurance to have. Your coverage will cover your dwelling place and detached structures that are on your property. Essentially, it gives you aid to rebuild or replace structures on your property in the event of events such as water damage, explosions, storms, or natural disasters. The structures on your property include the actual house, front and back porches, decks. Also, sheds and detached garages are covered under this kind of insurance, but you’ll have to tell your insurer to include it.

So how much coverage do you need for these items? It’s really up to you. However, it’s recommended you have a full replacement cost of your home and detached structures on your policy. Realistically, this is the most amount of coverage you will need on your home. The worst-case scenario of damage is having to rebuild your home.

How much does a replacement cost? Everyone is different. It depends on your house.

Account for these factors to determine the replacement cost:

  • The square footage of your home.
  • Local construction costs.
  • Amount of rooms and types of rooms that determines the types of appliances to cover
  • What types of materials were used in the construction.
  • Account for the fact that in many areas, new homes have to meet certain building code standards. This may increase your replacement cost, so don’t hesitate to bring this up to your insurer.
  • Consider that in the future, should you need to rebuild, the cost for materials may increase.
  • Your neighbourhood. You’re going to want to rebuild in a way that matches the style of houses on your street. Higher luxury houses will mean a higher replacement cost.

Home Contents Insurance

How much home contents home insurance do you need? Well, this all concerns your personal property, which are items inside your home. It will depend on what you have in your home and what you wish to include in your coverage. Contents insurance applies to items such as furniture, appliances, clothes, special expensive items, electronics, wall art, jewellry, etc. The reason you would need to have insurance for these items is in the event of theft, loss, vandalism, break-ins, etc.

The question about contents insurance is usually how much is needed. Or if it’s even necessary to cover every item you own.

Here are the steps to get you started thinking about this:

  1. Take inventory of your items. Go room-by-room and note things you want insured. You can exclude non-expensive toiletry items, stationary products, or anything that’s easy to replace. Don’t include your special items or expensive jewellery yet as that will be a separate add-on for your contents insurance.
  2. Determine the cost it would be to replace all your belongings in the event of fire, storm damage, or where your house belongings would be damaged, destroyed and gone.
  3. If you have expensive jewelry or art, musical instruments, and special memorabilia you will need an add-on for these items. See below for more information.

Personal Liability Insurance

Liability insurance covers accidents you are held liable for. For example, if fire breaks out in your home and spreads to another person’s property or if someone is injured in your home. The liability insurance will cover that person’s medical payments or the costs to repair their property which has been damaged.

So how much is enough? Most homeowners get a minimum of $100,000 in liability insurance. This is a good minimum, however it’s advisable to get $300,000 to $500,000 because you’ll be covered for events of higher severity.

Additional Living Expenses (ALE)

If your house is damaged in a fire or by severe weather events, your house will be covered for repair, but where will you live in the meantime? Your insurer can cover hotel expenses and restaurant/food expenses for a while if you can’t live at home for the aforementioned reasons.

Most insurers will give you an ALE policy based on 20% of your house coverage. It’s possible you can increase your ALE coverage, but you’ll have to bring that up to your insurer.


The four items of insurance above are the ones that every person buying home insurance should get. Consider it a standard. It’s what applies to everyone’s needs. Anything beyond that will be an add-on that you’ll have to mention to your insurer. You may not even need add-ons at all.

Here are some common add-ons:

  1. Jewellery and valuable items: If you have expensive jewellery, precious gems, art, special memorabilia items, expensive sports equipment, or musical instruments, you need an add-on for special items. They will not be insurable under basic contents insurance.
  2. Natural disasters. This applies to you if you live in a region that is prone to tornadoes, earthquakes, hurricanes, floods, etc. Know what types of natural disasters are common in your area, because damage from these perils are usually specific.
  3. In-home business insurance. Items in your house that are used for business purposes require an add-on to be insured.
  4. For water damage. Believe it or not, water damage is not always covered, but it’s one of the most common claims that people make.

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