One of the biggest mistakes you can make when it comes to buying home insurance is not buying enough. Unfortunately, according to CoreLogic, about 60 percent of all homes in the United States are underinsured.
Here’s more about how much home insurance you actually need. 
How Much Dwelling Coverage Do You Need?
Dwelling coverage refers to the portion of a home insurance policy that can help cover the costs of repairing or even rebuilding your home's physical structure in the event that it is damaged. Your front porch, deck, and garage are also covered by dwelling coverage. If your house is burned down in a fire or is destroyed by an earthquake or flood, your dwelling coverage will kick in.
The amount of dwelling coverage you should have is equal to your home's cost of replacement. The replacement cost is the amount of money required to build an identical version of your home. It is incredibly important to have sufficient dwelling coverage.
How Much Personal Property Coverage Do You Need?
Not only do you want coverage for the physical structure of your home, but you also want coverage for your belongings. This type of coverage is called personal property coverage. Some examples of personal property include appliances, electronics and furniture. Even your food can be considered personal property. In the event that your power is knocked out and the food in your fridge goes bad, personal property coverage may help cover the cost of restocking your fridge.
In general, personal property coverage will kick in if your belongings are vandalized, stolen, or damaged. To make sure you purchase enough personal property coverage, you should consider how much money you would need to replace everything in your home.
How Much Liability Coverage Do You Need?
Liability coverage is the portion of your home insurance policy that will cover the cost in the event that someone is injured on your property. If an accident occurs on your property, this coverage will help cover the cost of the lawsuits and medical bills. The minimum amount of liability coverage you are required to purchase is typically $100,000. However, you should strive to purchase $500,000 in liability coverage.
Many homeowners are underinsured when it comes to home insurance and they don't even know it. If you suspect that you might be underinsured, it is important that you review your policy and make adjustments as needed, based on the information above.