First Time Deal--How Much To Spend on Insurance?

[Clay Manship]

Hey all-

Currently have my first deal under contract. It was taxed at $65,000, but purchased for $25,000. It is currently tenant occupied, and will be until June 2014.

I spoke with some insurance guys today, and their quotes kind of surprised me. I was quoted $100/month for 100% of rebuild value, and $83/month for 80% of rebuild value.

My question for you all is: How much should I be paying in insurance, per month, for a home that I am spending $25,000 on? $90ish seems pretty high, but the guys said that anything under 80% rebuild value would be done on a "cash value" basis, or how much the structure is actually worth. Isn't this more of what I am looking for than a "rebuild" on a $25,000 home?

Please help!