Be sure the company is easy to contact. Your coverage should match the value of your home. Homeowners insurance can not cover the land your home is on, only the structure. That means that the insurance amount could be less than the purchase price or loan amount. In general, replacement coverage means that in the event of a loss, the insurance company will pay what it costs to replace the property at today's prices.
Different insurers offer different levels of replacement coverage.
Replacement cost is the amount to repair or replace the damaged property using materials of like kind and quality, without deduction for depreciation. Depreciation is the loss in value that develops as an item ages, wears out, or becomes obsolete. Actual Cash Value is the replacement cost of an item, less the amount for depreciation. Homeowners insurance will also cover the property you own as well as the structure itself. Your clothing, furniture, appliances, and other belongings will usually be insured up to a maximum limit.