Does your homeowners policy really cover you?
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However, a few policies pay only for the "actual cash value" of your home. That is, the insurance benefit covers just the value of your home and its contents minus depreciation. So, if your 15-year-old deck is damaged, the insurance company will pay only the amount that your deck currently is worth, not the amount it would cost to replace it.

Actual cash value policies tend to be more common when covering the contents of your home. Even here, however, many companies offer optional content coverage so you can insure your belongings at replacement cost. Ask your agent if this is available.

Many companies go beyond replacement cost and offer "extended replacement cost" for your home. This means that the insurance company will pay up to a certain amount over the policy limits in order to cover the cost of rebuilding your home.

Say your home is insured for $150,000. With an extended replacement-cost policy, the insurance carrier might pay up to 25 percent above the policy limits, or $187,500, to rebuild your house. This covers you in case the cost of rebuilding your home increases dramatically. That can happen in areas where there's widespread damage from a disaster, as demand for building materials and labor skyrockets. Prices often follow along.

One note: If you have a very old estate with, for example, hand-carved wood molding, a standard homeowners policy, even with extended replacement cost, won't necessarily cover the costs of handcrafting new wood moldings, says Jeanne Salvatore, vice president of consumer affairs with the Insurance Information Institute. "Instead, the materials would be replaced with materials that are similar."

If you truly would want to rebuild your estate to exactly as it was, you'll probably need to talk to an insurer that specializes in high-end homes. A word of warning: The increased coverage will be reflected in the premiums you pay.