How Much Is Too Much? Determining the Proper Coverage for Your Home

how much home insurance do you need?

Can a person have too much insurance coverage? The answer depends on your perspective. Insurance is meant to protect you and your belongings, so the question becomes, can a person have too much protection? Maybe – but many homeowners across Canada are still living with inadequate home insurance coverage. At the very least, it’s important to make sure you have enough insurance to cover the structure, your possessions, any additional living expenses if your home is damaged and you have to live elsewhere during repairs, and your liability to others. Read on for a few tips to help you determine the proper insurance coverage for your home!

Make Sure Your Home Is Insured for at Least 100% of Its Estimated Replacement Cost

You’ll want to make sure that your policy covers the cost of rebuilding your home – not just the value of your home! What’s the difference? The replacement cost takes both labor and supply costs into consideration. There are many factors that go into determining the estimated replacement cost of your home – local construction costs, size, special features, and more – so chat with your insurance broker about the best way to go about getting this price.

Review Your Policy Annually

It’s important to review your home insurance policy regularly to insure that it continues to meet your needs. There are a number of reasons why your estimated replacement cost may change on a yearly basis, such as:

  • Renovations or other home improvements
  • Rises in inflation
  • Market conditions that affect construction costs

During your annual review, you can update your broker and policy to include any new high value items that are now in your home as well.

Don’t Assume Your Policy Covers You For Everything

Many homeowners assume that their standard home insurance policy covers them for any sort of incident, which isn’t always the case. Things like flood insurance, sewage backup protection and mold protection aren’t usually included in a standard policy and are added on as additional coverages when applicable. Your broker can help to determine your risks and can recommend additional coverages that might be useful for your unique situation.


If you have questions about home insurance, contact the team at Capital Insurance. Our expert brokers will ensure you get the right coverage for your needs.