The important point to consider when trying to determine the value of your house for insurance purposes is to remember, the insurance company is responsible for repairing or rebuilding your house after a loss. The market value of your house (or the amount it's worth if you were to sell it) is not as important as the replacement value of your house, which is the amount it would cost to rebuild your house if were totally destroyed, by a fire for example.
Note. Homeowners coverage insures both the structure of your residence and your personal property, including personal property that is not located in your home.
Tip. When insuring the structure, you want to make sure you have enough coverage to rebuild your home if it is destroyed. In other words, the limit on your policy should be equal to the cost to replace your home.
How do you find out what it would cost to totally rebuild your house? Your insurance agent can have an answer for you in no time. If you don't have an insurance agent - and you should - you can contact your local builders association.
Tip. In the home construction world, building costs are calculated on a square foot basis. As such, to determine the cost to rebuild your home, take the square footage of your house and multiply by the average square foot building rate in your area.
Some losses are not covered by your typical homeowners insurance policy; flood and earthquare are two examples of losses that are generally not covered.