Insurance companies will insure your house on the reconstruction value - that is the cost to rebuild the house. You can choose to insure the contents at reinstatement (replacement) value. You can also insure at market value, which deducts depreciation for used items.Sardesai Finance recommends that a person should have an emergency fund to cover sudden expenses, like in the case of a job loss. "The emergency fund should consist of an amount which is equivalent to your six months living expenses to take care of situations such as job loss," Sardesai said. Hindustan Times