One key to ensuring you get the best insurance policy is by familiarizing yourself with the relevant terms. Here are a few to get you up to speed.
1) Betterments: For condo or co-op owners, any renovation work you do — walls, floors, fixtures, etc. — is considered betterments, or addition.
This is an area where many people are underinsured. If, for example, those new marble floors you’ve installed get destroyed, the improvements portion of your apartment insurance covers the repair and replacement.
2) Replacement Cost Value (RCV): If you owned a digital camera with 3x optical zoom for two years before it got stolen or damaged, RCV insurance would give you the current market value for a new camera of similar specifications.
You actually have to replace the item to get replacement cost. If you just opt for a cash settlement, depreciation will be applied.
3) Actual Cash Value (ACV): If that hi-def big screen TV you’ve owned for two years is damaged or stolen, ACV insurance takes into account that it’s been through wear and tear, thus depreciating its value from the current price.
Choosing ACV for your apartment insurance means your monthly premium will be lower, but it’s usually not worth the savings. While replacement cost (RCV) can add 25 to 40 percent to the cost of coverage, you can easily get back 50 cents on the dollar in the event of a claim.
4) Loss of Use: When a fire or water damage prevents you from living in your apartment, Loss of Use coverage in your apartment insurance picks up the hotel expense, even meals.
Built into most policies, this coverage will also pick up transportation costs when a claim forces you out of your apartment. For long term situations, the real estate agent’s fee can also be covered.
Get in touch with Gotham today for a free quote.
A version of this post originally appeared on Brownstoner.