Up to you but you may wish to consider insuring for just the cost of the building and perhaps a little for demolition costs in case of a total loss. There is no reason to insure based on the purchase price which includes land costs and also you can likely subtract the cost of the slab which is unlikely to be damaged by fire. This assumes you would rebuild at the same site. Do you need to cover costs to live elsewhere during that time? How much coverage for the home's content? Discuss these options with your agent...
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