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Washington State Office of the Insurance Commissioner

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How much homeowner insurance do you need?

When deciding how much homeowner's insurance you need to protect your home, contact your insurance agent. He or she can professionally assess your coverage needs.

Be prepared to provide information about your home's:

  • Square footage
  • Roof type
  • Recent improvements, such as a new deck or a room addition

Coverage for outbuildings and unattached structures

Your homeowner policy generally covers outbuildings and unattached structures on your property.

It doesn't cover another residence on your property, such as a rental or mother-in-law apartment.

Check your policy for coverage amounts and limits. When in doubt, ask your agent.

Is your home financed?

Your bank requires you to have enough insurance coverage to protect their investment in your home. They also may require you to name them on the policy as the lien holder.

If you have coverage and lose it, it's important that you find coverage as soon as possible. Otherwise, the mortgage company will buy it for you and it's expensive.

Know the difference between replacement cost and actual cash value coverage

  • Replacement cost coverage is the most common type of coverage. It pays to replace or repair your property. The company will pay you the actual cash value until you actually repair or replace your property. Then they will reimburse you the difference. 
  • Actual cash value coverage pays you the amount to replace or repair your property, minus how much it's depreciated. For example, if you bought a TV for $1,000 five years ago and it was damaged in a fire, your policy would pay you the amount your TV is worth today, not the amount you paid for it.

Whether you choose replacement cost or actual cash value, keep track of your property's value using a written home inventory checklist (PDF, 1.36 MB). Keep it in a safe place in case you need to file a claim.




Updated 04/24/2012

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Need more help? Call our FREE Insurance Consumer Hotline at 1-800-562-6900
or Email us at cap@oic.wa.gov.