As your home is normally the most expensive thing you will ever buy it is advisable that you insure it. If you bought your home with a mortgage, your lender will probably have insisted that you take out buildings insurance. This covers you against all sorts of risks such as fire, floods, and even earthquakes. It also covers you for the fittings in your home which would not be taken with you if you were to move.
The property has to be insured for what it would cost the insurer to rebuild the home. This cost has to be worked out.
There are numerous Insurers and associations that will help you work out this cost, however you may also decide to do this for yourself. The insurer should be able to offer you a rough cost for rebuilding a square foot, this should then be multiplied by the total floor area of your home.
If you are buying a home, the lenders valuation report should contain a rebuilding figure for you to compare against your own calculations.