You need to think about insuring the structure of your home, which we call "buildings" insurance as well as what’s in your home, which we call home "contents" insurance.
For buildings insurance, you should insure your home for its full re-building cost, i.e. how much it would cost to rebuild your home if it was totally destroyed. This is different to the market value of your home.
You can find your home's rebuilding cost on the Valuation Report or Survey report which was completed when you took out your mortgage (although, if it is more than a couple of years old, it might need to be increased to take account of inflation).
For contents insurance, you should insure the contents of your home for the amount it would cost you to replace them as new today.