In selecting an appropriate amount of coverage, be sure to avoid the most common consumer mistake — insuring your home for what it costs to sell (the market value), rather than what it costs to replace. Homeowner policies are designed to cover the cost of reconstructing your home should it ever be destroyed. Therefore, you should select an amount of insurance that represents the replacement value of your home. Look for a company that assists you in the valuation of your home. Additionally, look for a company that provides a payment basis called “extended replacement cost”. This payment basis helps you rebuild your home even if it exceeds the amount of insurance on your policy.