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The Curious Bag
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When you live in an apartment, you can purchase renter's insurance to protect personal belongings from certain types of damage or theft. Renter's insurance also helps pay for temporary living arrangements.
Significance
If your apartment is unlivable because of damage, renter's insurance will pay for you to live in a place similar in price to your apartment, until you can return to your residence. The benefit is limited to a percentage of your total coverage.
Function
When an apartment is destroyed because of fire, your contents are covered under your renter's insurance policy.
Prevention/Solution
A renter's insurance policy will also cover you if items are stolen from your apartment or if someone vandalizes your personal property.
Expert Insight
Your policy could be set up to provide coverage for the actual cash value of your personal property. According to MSN Moneycentral.com, this is the value of your property when it is damaged or destroyed, not the purchase price. An insurance company can also offer replacement coverage, which is the amount needed to replace the destroyed item.
Benefits
According to MoneyCentral.com, most renter's insurance polices have a provision that covers your apartment if damage occurs from a faulty waterbed. The person's apartment below yours is also covered.
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