Shelby and Mark Lawrence recently purchased a condo as their first home together. They have been advised by their parents, Matthew and Madison, to obtain homeowner’s insurance from a reliable company and to analyze their situation to determine the appropriate coverage. At the same time, they need to review the components of their automobile insurance on their vehicles to make sure their coverage is appropriate and adequate. They admit that they could use some help in understanding both types of insurance.

Questions 1. When obtaining homeowner’s insurance for their condo, what factors should the Lawrences consider in determining the amount of home insurance coverage they will need?