[terry1156]

Replacement - The insuance company will pay the cost to replace your house and contents (usually up to a specified amount)

Fair Market - The cost of the item plus depreciation. In this case you would only receive a fraction of what the items cost (for your contents)

I think you would want to be able to replace everything you lost with similar, new items if they were ever destroyed. Therefore make sure that both your home and its contents are covered by replacement-value insurance. This will cost more than fair market, but I think it is worth the cost.