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This type of policy will provide cover in the event of your home being severly damaged or destroyed e.g. by fire. The amount insured should be for the cost of rebuilding rather tha the resale cost of the home, You should also make an allowance for the demolition and disposal of the damaged structure.
If your property is an apartment, the building shell is probably already covered by the community insurance. In that case, you do not need to cover yourself for a full rebuild. You are responsible for all fixtures, fittings, plumbing etc. in your apartment, and for any damage or loss to a neighbour e.g. from a leak in your apartment. First Loss cover will protect you against this type of loss.