It is important to properly insure your home.
You want to avoid over-insuring and also stay away from under insuring.
Pinpointing the exact amount of homeowners insurance to buy is hard to do, especially with an older home.
It is a good idea to get what is called an extended replacement cost guarantee (for more information: see article Requirements to qualify for extended replacement cost coverage).
It may be called something else, depending on the insurance company you are dealing with.
In the event that your home is destroyed this type of policy coverage would cover the total amount to rebuild the house, even if the total amount is well over the amount your home is insured for.
Normally, this type of coverage can be purchased for less than $50 a year! This is well worth your peace of mind, in the event that your home is demolished in a tornado or damaged and completely burned in a kitchen fire.
Typically, insurance only covers 125% of your coverage limit.
But there are still some agents who offer no limit on your coverage.
If you find someone to insure you who will offer this, I would suggest you take advantage of having no cap on your coverage limit.
Some insurance companies do not offer an extended replacement cost guarantee.
If you have an older home, keep shopping around.
You should be able to find an insurer that will guarantee you total replacement coverage.
All in all, by paying $10-$50 a year, you can rest peacefully knowing that your home will be completely re-built in the event of severe weather conditions or an accident.
This is a small price to insure that you will have the strong foundation of your home for years to come!