How much insurance do I need?

[Charlotte Edwards]

The purchase price of our house (in Illinois) is $68k and one of the insurance agents I got quotes from (still waiting on the other) gave a quote actual cash value (56,000 being the coverage amount) for $300/year, but when I asked for replacement cost coverage, they did coverage for 201,000 which is $900/year.

From reading through past posts, I am quite sure I want the replacement cost, but do I need 200k in coverage? My realtor said that she pays about $500/year/house for insurance, which is why I think this quote of $900 is out of line.

Thanks for any insight you can give on this being reasonable or not.