A basic home owner's policy protects you in 2 ways:
1. It insures you against loss or damage to the property itself.
2. It also protects against liabilty.
There are many ways you can add or amend basic policies. Most insurers offer varying deductible rates, which can effect your annual premium.
The following qustions will help you sort through certain options:
1. How much coverage do you need? You do not need coverage for the entire purchase price of your home. You would normally deduct the price of the land.
2. Replacement cost vs. actual value? Actual cash value may not be enough due to rising construction costs. Most buyers choose "replacement cost", which is a little more expensive, but will pay for rebuilding you home, no no matter the cost.
3. What are the "named" and "unnamed" perils? The best policy is "all peril" which covers damage from anything not specifically included in the policy language.
4. Do you need personal property insurance? This is highly recommended. You will want to take pictures of rare, very expensive or "one of a kind" items.
5. What are your additional living expenses? For example, if you are stuck in a hotel for a month.