After emerging from the legal and financial jungle of negotiating your new home and fulfilling the mortgage requirements, you may be tempted to hone your insurance policies to the minimum at a cash-strapped time.Equally you may opt for the insurance package offered by your building society or bank without shopping around. But it is important to examine what is on offer and to weigh up the costs involved.When completing the mortgage, you will be required to take out a mortgage protection life assurance policy and buildings cover. The buildings insurance covers the building against fire or other damage and is a prerequisite for mortgage holders along with the life policy.You will be faced with a range of options from your insurer regarding contents cover, providing protection against fire, theft and damage.Insuring possessions for city dwellers who are more likely to be burgled. The lower risk associated with rural life is reflected in much lower premiums but there are dangers associated with rural areas, such as the prolonged electricity cuts at Christmas which left seasonally stocked up freezers full of rotting food. Equally, fires can happen anywhere and flooding is indiscriminate.Whether availing of just buildings cover or a package covering contents, the starting point for a policy is a correct valuation of the property. Insurers ignore the market value, relying instead on the "rebuilding cost" valuation, an index which has some variation between city and country. The figure assumes you have your site and is calculated on the cost of rebuilding your home if, for example, it was destroyed by fire, flooded or struck by a meteor.The cost includes demolition, removal of debris (including the aforementioned meteor), construction work and professional fees. Extra costs have to be factored in more expensive fixtures, outbuildings on the property, the foundation and inflation.Mr Eoin O Cofaigh, a member of the Royal Institute of the Architects of Ireland, has prepared a leaflet A Guide To Rebuilding Costs for the AIB's information pack on home insurance. He provides guideline costs of £65 per sq ft for a Dublin house of more than 1,350 sq ft and £75 per sq ft for under 1,350 sq ft. In rural areas, costs are 15 per cent cheaper for the larger house, at £55 per sq ft, and 20 per cent cheaper for the smaller building, at £60 per sq ft. "Other urban areas" fall in between.For a three bedroom semi-detached house with a separate garage and shed in a Dublin suburb (1,300 sq ft), the buildings sum insured works out at £108,900. But the market value, depending on the location, might be about three times that figure.Insurers stress the importance of doing you homework at this stage. If you are over insured the assessors will put you right on the day of reckoning. You are "robbing yourself", as one insurer put it. If you are under-insure you may find yourself feeling shortchanged one day.The insurance industry maintains that a significant number of people under-insure their contents. They take out policies for £10,000 or £20,000, and when you get down to it, they do not have adequate cover. The mortgage lender will look for a survey report on the property which will give an estimated rebuilding cost, but the temptation remains for a householder to under-insure on a contents policy.The home insurance market is a diverse area, which moist financial institutions, including credit unions, now offering cover. Generous discounts are available for having a burglar alarm to IS 199 standard, for smoke detectors, if the householder is over 50, and for first-time buyers.Equally, there are exclusions, which are common to most insurers. Under building cover, these may include damage to the property caused by normal "wear and tear", bad workmanship or defective materials.Of course, you are not necessarily tied to your buildings cover insurer and can shop around for a contents policy you feel most suits your needs.The necessity of carefully examining the covers provided - even by so-called standard policies - cannot be over-emphasised.