Did you buy it as a rental or convert it from personal use?
If you bought it and immediately made improvements, then your basis is cost plus improvements. Land is separated out for depreciation purposes, since it can't be depreciated.
If you converted it from personal use, your basis for depreciation of the property is the lower of Fair Market Value or adjusted basis. Your insurance has nothing to do with it. Fair Market Value is what you could sell it for today. You can use Zillow or other similar sources.
