You can estimate the value of your real property two ways. For insurance purposes, replacement cost is used most often. To estimate replacement cost, multiply the square footage of your house by the current construction cost per square foot. A local builder can give the figures to do this, or you can hire an appraiser. Under this policy, you can insure your house at the lower market value amount.
Few people can make such estimates.
That is why you should inventory your belongings. Go through each room and note every item. Write down the price you paid, model numbers, and date of purchase of furniture, appliances, and other household items. You can also get inventory lists from insurance agents or from the Insurance Information Institute. In addition to making a written record, it's smart to take pictures of room furnishings and certain items.