When purchasing a home, insurance is a cost many don’t consider. But that annual payment can save you lots down the road if something happens to your house. How much insurance is enough? According to the Insurance Information Institute, there are four main areas you need to consider when purchasing homeowners insurance:

Your physical home. You’ll need enough money to rebuild your house, but don’t figure in the cost of the land. Depending on the economy in your area, that may be more or less than the amount it cost to build your original home. A local real estate agent can give you a good idea of current construction costs in your community.

The things you own. Most policies give you approximately 50% to 70% of the value of your physical home to replace the possessions inside. It’s up to you to determine if that’s enough to replace your things. If not, you may need additional coverage.

Living expenses while your home is repaired. If your home is destroyed in a fire or other covered disaster, you’ll need money for hotels, food, and other expenses. This type of coverage can really vary from company to company – talk to your agent to make sure you have enough.

Your liability to others. If someone trips on your sidewalk (or over your pet), you may be liable for damages. Most policies provide a minimum of $100,000 in coverage, but you may want to consider at least triple that amount.

As always, shop around. Different agencies can offer widely different rates. And many insurers offer discounts if you bundle your homeowners insurance with auto or other insurance products.