Your home is your personal retreat, your pride and joy, and the place where you spend the most time bonding with loved ones.

It may also be the single biggest investment of your life. That’s why it’s vital to safeguard both your property and your finances against a variety of dangers with an optimal homeowners insurance policy.

However, picking the right one is a multifaceted process, and sifting through your options—for everything from plan providers to appropriate coverage amounts—can leave you scratching your head. Thankfully, there’s a simpler way to shop: Ask yourself the following questions before you make the leap to enroll in a policy.

Do I need homeowners insurance?

While you are not legally required to insure your home, it’s in your best interest to do so, whether you purchase a single-family house, condo, townhome, mobile home, or virtually any other type of dwelling. These plans can seem costly, but the overwhelming advantages of buying one can more than make it worth the price. Plus, if you plan on using financing to buy your home, you may need proof of coverage, as most lenders will request it before approving a loan application.

What coverage do I need?

Homeowners insurance covers a wide range of perils—essentially, things that can go wrong on your property. There are four major categories of coverage in a standard policy:

1. Dwelling coverage funds the cost to repair damage to any structure on your property, including a house and detached garage. A standard policy covers multiple common perils, such as hail, vandalism, and theft, but typically omits floods and earthquakes.
2. Personal property coverage helps pay to replace any belongings in your home, including furniture, electronics, and clothing, that are lost, stolen, or damaged. You may have to pay extra to insure high-value goods like jewelry and fine art.
3. Personal liability coverage protects you if someone is injured on your property, extending payments for their medical fees and your legal fees should you be sued.
4. Living expenses coverage provides compensation for the costs of temporary housing if you are displaced from your home. For example, if it is damaged due to a tornado, this protection will pay for a hotel stay and related costs while it is rebuilt.

Always read through the details of a policy before you enroll to ensure the hazards that concern you most are included. Depending on your home, lifestyle, and region, you may wish to supplement your coverage. You can buy additional protection against water backup damage, earthquake or windstorm damage, swimming pool-related injuries, and a wide variety of other perils.

How much coverage do I need?

This figure can vary depending on the coverage type and your personal situation. Dwelling coverage is more straightforward: it should ideally cover the total value of your home. While this may seem excessive, underinsuring can leave you on the hook for exorbitant construction costs should a disaster like lightning render your home uninhabitable. Ask an insurance professional to help determine the value of your residence, then adjust your dwelling coverage accordingly.

For the other three coverage areas, you’ll need to assess your specific needs. To obtain sufficient personal property coverage, inventory all your possessions for an estimated value; consult the Insurance Information Institute’s instructions on how to do so effectively. When determining how much liability coverage you need, calculate your total assets: savings, all property you own inside or outside of the home (such as vehicles), and other financial value that could be seized if you are sued. And while you can also choose to increase living expenses coverage, many people prioritize paying extra for the former coverage areas.

How much does insurance cost?

According to Bankrate, the current national average for homeowners insurance is $1,428 per year for $250,000 in dwelling coverage. However, this amount will vary drastically based on the value of your home, your zip code, local construction costs, and many other factors.

If the price for a policy gives you sticker shock, consider ways to save. For instance, you could elect to enroll in a plan with a higher deductible, which would lower your premiums by raising the costs you pay out of pocket when you file a claim. You can also reduce your rates by cutting coverage amounts, but try not to underinsure your home or assets. For extra savings, you may be eligible for discounts if you are a first-time homebuyer, you choose to bundle coverage with another policy like auto insurance, or your home includes safety features such as a security system or storm-resistant windows.

What if I need assistance?

This is strongly recommended. Enlisting the guidance of an insurance broker or agent can help take the hassle and confusion out of a complex shopping process. They can help you find an appropriate policy based on what you can afford, your property’s value, and your risk of specific perils. One of the most important services they can offer is calculating the amount of coverage you should buy. Additionally, they can help you make sense of other policy options, including coverage for actual cash value versus replacement cost value of your home and possessions.

From there, they can enroll you in coverage at a competitive price and help you identify qualifying discounts. Best of all, they may offer you the peace of mind that comes with accepting excellent coverage at a reasonable rate.