You should insure your home for the total amount it would cost to rebuild your home if it were destroyed. If you don't have sufficient insurance, your insurance company may only pay a portion of the cost of replacing or repairing damaged items. To find out the building rates in your area, consult your local builders association. Check the value of your insurance policy against rising local building costs each year. This automatically adjusts the dwelling limit when you renew your policy to reflect current construction costs in your area.
Building codes require structures to be constructed to minimum standards.
If your home is severely damaged, you might have to rebuild it to comply with the new standards requiring a change in design or building materials. These changes could cost more. However, some companies offer an endorsement that pays a specified amount toward these costs. Do not insure your home for the market value. Some banks require you to buy homeowners insurance to cover the amount of your mortgage.