The first and foremost thing to look for in a homeowner’s policy is to make sure that your policy is a guaranteed replacement cost policy.  This is because the guaranteed replacement cost ensures that the entire replacement cost due to fire or other disaster will be covered, regardless of the dollar amount needed for replacement.  A cash value policy places a limitation on the amount of coverage and with inflation and rising costs this could leave you severely underinsured.  Also, make sure that your home is covered in its entirety.  Be aware that homeowner’s policies do not cover earthquake or flood, so be sure to purchase a separate policy if you live in a high risk area. 

A homeowner's policy also protects your assets within the home.  Be sure to include adequate protection and take inventory of high dollar items such as jewelry, collectibles, furniture, and expensive clothing.

A good homeowner's policy should also include liability coverage of at least $100,000.  This simply covers you in the event that a neighbor hurts themselves in your home or yard or if your dog destroyed the neighbor's yard…  This can also be very important if you own a trampoline or swimming pool.  If your risk is a little higher, consider increasing your liability coverage.