The first matter to consider is just what the insurance is needed to protect against. Fire is an obvious danger, but fire is not the only thing that can cause damage to a structure. Buildings near bodies of water need flood insurance. Buildings located in areas with a higher incidence of crime need insurance against theft and vandalism. Coverage against accidental damage may be wise, as well.

Building insurance covers any part of the building that is fixed to the structure - those things the occupant will leave behind when moving out. Bathtubs and other plumbing elements, light fixtures, and furniture that is attached to the structure itself are covered. The surrounding property is also covered, items such as fences, sidewalks, garages, and sheds.

Another aspect of the "how much should I insure my buildings for?" question is liability insurance. If someone is hurt on the property and holds the owner legally liable, this could end up costing a great deal of money. Liability insurance will pay the court settlement if necessary. Businesses most commonly purchase this type of insurance, but homeowners can benefit as well. A high court judgment could mean the loss of the house if it cannot be paid.

Think of what might happen if there is no insurance at all. Is it possible that a legal decision could force the sale of the home or business? How much would it cost to replace the buildings or the surrounding property without insurance?

Estimate the price of coverage by checking the actual value of the building, rather than the entire property. The land, after all, will still remain after a disaster. At worst, the property will have to be cleared of debris and the building itself rebuilt. This includes fences, fixtures, and outbuildings.

The price of insurance can be lowered in a number of ways. It may be less expensive to get building and contents insurance in a package, rather than separately. Buildings with added security or safety features can also get a discount from most insurance companies, since this lowers the risk of the building owner needing to file a claim.