Does your homeowners policy really cover you?
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Less commonly, some policies offer "guaranteed replacement coverage," in which the insurance company covers the costs of rebuilding your home, no matter the price tag. These were popular until about a decade ago, when the insurance companies began losing too much money on them.

2. Inflation guard
A policy with inflation guard enables the insurance company to automatically increase the policy limits to keep pace with inflation. "Sometimes, this is automatically included; sometimes it's not," says Salvatore of the Insurance Information Institute.

A policy can offer both inflation guard and extended replacement cost. Here's how that might work: Say you purchased your policy two years ago with a value of $100,000. It also has inflation guard and extended replacement cost, which is capped at 25 percent of the value of the policy.

In each of the previous two years, the limit of the policy increased by 5 percent, so that it now covers $110,250. The extended replacement provision would offer $137,813, ($110,250 multiplied by 1.25) in coverage should you have to rebuild your home due to a loss.

3. Building code upgrade
If your house was built before current building codes went into effect and has not been updated, you'll want to ask about "building code upgrade" provisions, which also are known as "ordinance or law" provisions. As their names imply, these endorsements cover the cost of rebuilding an older home to meet current construction regulations. In most cases, ordinance or law endorsements are not automatically included in a homeowners policy, so you'll need to ask your agent about them.

For instance, some municipalities in California require homeowners who are rebuilding to use tile or aggregate roofs, rather than shingles, as they're more likely to resist fire. However, they're also more expensive.

It's difficult to say how old a house should be before you'll want to consider a law or ordinance provision. "One would have to review the building codes of a specific municipality to determine if there have been changes, and when," says Tim Wagner, Nebraska director of insurance and vice chair of the property and casualty committee of the National Association of Insurance Commissioners.

4. Added living expenses
If your home is damaged to the point where it's not habitable, you'll probably end up paying for a hotel room and meals for at least a couple of months. In areas where there's widespread devastation, as in southern California, the time frame can stretch even longer, as the supply of builders and materials won't be sufficient to complete everyone's house at once.

You'll want to verify that your policy will cover the additional living expenses you'll incur as your home is being rebuilt. You'll also want to check any caps on the amount. For instance, the policy may cover expenses only for six months, or it may state that it will cover expenses up to some percent of the value of the policy.

5. Special contents
Some items, such as costly artwork, antiques and jewelry, are unlikely to be covered under most standard homeowners policies, or the limits may be a fraction of their value. For instance, a standard policy may cover only up to $500 in lost jewelry. If you have expensive items or keep a great deal of cash at home, you'll need to purchase additional coverage.

No matter what kind of coverage you decide on, make sure you keep a copy of your policy, as well as an inventory and photographs of your home and its contents, outside your house -- preferably in a safe-deposit box. The more quickly you can present this information to your insurance company when you suffer a loss, the more quickly you're likely to be paid, as your insurance carrier won't need to spend as much time investigating your claim.

Number crunching
Once you've gained a good handle on the types and levels of coverage you have, compare them with the costs you're likely to incur in the event of a loss. Get input from your insurance agent, if necessary. If your coverage appears like it might come up short, consider boosting it.

"The No. 1 principle is you don't want to be penny wise and pound foolish," says Bach of United Policyholders. While every policy is different, upping your coverage limits often does NOT mean large increases in your premiums.

If increasing your limits will make your policy unaffordable, look carefully at the level of your deductibles. "Ask yourself whether you're insuring for nuisance events or catastrophes," says NAII's Annotti. If you want every broken window or damaged shingle covered by insurance, your premiums will reflect it. On the other hand, if you're willing and able to handle more small losses yourself, your premiums should be lower.