I know they have replacement insurance on the contents. I think this extends to the house, as well, but the element of concern is the contents. They're depreciating everything with the caveat that they will fully reimburse for any items that are bought again. For instance, if a computer was $1,000, and the insurance company only gave $600 for it, they would give the remaining $400 upon proof that the computer was replaced.
A guy I know said his insurance company tried to pull this same sort of boloney, even though he has replacement insurance. He said that once he had a lawyer tell him the insurance company couldn't do this, the insurance company backed down and reimbursed him fully.