If you rent an apartment or own a condominium,
you need insurance to protect your belongings. There are several
types of residential insurance policies. Some are designed for
renters, while others are for condo owners. Both cover losses
to your personal property from major types of events including
weather, natural phenomenon (excluding floods and earthquakes),
water or electrical damage, and damage or theft caused by people.
An insurance company will offer "actual cash
value" (ACV) or "replacement cost coverage" for your belongings.
ACV coverage will pay only for what your property was worth at
the time it was damaged or stolen. Replacement cost coverage will
pay what it actually costs to replace the items you lost. In some
regions, most insurers write ACV coverage; in others, replacement
cost coverage is standard. Replacement cost coverage will cost
you more in premiums, but it will also pay out more if you ever
need to file a claim.
If your apartment or condominium becomes uninhabitable
due to a fire, burst pipes, or any other reason covered by your
policy, your insurance will cover your "additional living expenses."
Generally, that means paying for you to live somewhere else.
Liability protection is also standard with most
renters and condo policies. This means if someone in your unit
slips and falls, you're covered for any costs, up to your liability
limit. If this person sues you, you're covered for what they win
in a court judgment as well as your legal expenses, up to your