“How much coverage do I need?” is a question worth revisiting every year, not just when you first bought the home. The instinct is to leave your dwelling coverage wherever it started. That’s usually a mistake in a market where rebuild costs keep climbing. Here’s a clearer way to think about it.

Insure to rebuild, not to what you paid or what it’s worth

The most important number in your policy is dwelling coverage: what it would actually cost to rebuild your home from the ground up today. That number is rarely the same as your home’s market value or what you paid for it. Construction and labor costs in Washington have risen steadily, so a policy that made sense five years ago can be underinsured today. Ask about extended replacement cost coverage, which adds a cushion if rebuilding ends up pricier than your policy assumed.

The main parts of a policy

A standard homeowners policy bundles a few coverages:

  • Dwelling: rebuilding the house itself.
  • Other structures: detached garage, fence, shed.
  • Personal property: your belongings inside.
  • Loss of use: hotel and living costs if you can’t live there during repairs.
  • Liability: if someone is hurt on your property or you’re sued.
  • Medical payments: smaller injury costs, regardless of fault.

Don’t forget the deductible

Your deductible is what you pay out of pocket before insurance kicks in. A higher deductible lowers your premium but means more cost if you file a claim, so pick a number you could comfortably cover. In Washington’s higher wildfire-risk areas, especially Eastern Washington, some insurers apply a separate, percentage-based wildfire deductible, so read that line carefully.

What standard policies don’t cover

Two big gaps matter for Washington homeowners: flood and earthquake. Neither is included in a standard policy. Flood coverage is required by your lender if your home sits in a FEMA-designated flood zone, common along Puget Sound and Washington’s rivers. Earthquake coverage is optional but worth taking seriously here: Washington sits on the Cascadia Subduction Zone, one of the highest earthquake risks in the country, yet only around 1 in 10 Washington homeowners currently carry earthquake insurance.

A simple gut check

You’re probably in good shape if your dwelling coverage matches today’s rebuild cost (not purchase price or assessed value), your deductible is an amount you could pay tomorrow, your liability limit feels comfortable, and you’ve made a conscious decision about flood and earthquake coverage rather than skipping them by default. You don’t have to work through all of this alone. A licensed broker does this math every day.

Get a quote in minutes from an independent broker, and they’ll help you right-size each number.