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What Is HO-4 Insurance? A Full Guide (2021)

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Stephanie Shaykin

By: Stephanie Shaykin

Edited by John Leach

Last Updated June 4, 2021

Do you rent a single-family home, apartment, or condo? HO-4 insurance, widely known as renters insurance, gives you financial coverage when your belongings become damaged or lost. You also get the protection of legal fees and medical payments for others. Plus, if your home becomes uninhabitable, your temporary living expenses are covered.

There are all different types of coverage to fit your needs. But how do you know you’re getting the best home insurance at the best price?

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What Is an HO-4 Insurance Policy?

An HO-4 policy is widely known as a renters insurance policy. When you rent, you still need protection for personal property and personal liability. HO-4 insurance helps pay for replacing personal property when there’s damage or loss from a covered event. Your HO-4 will also cover legal expenses if someone becomes injured in your rental. And if you damage someone’s property on accident, liability insurance will protect you.

Additionally, HO-4 insurance covers medical payments for others. So, if someone visiting your rental home becomes injured and it’s your responsibility, your HO-4 policy will make medical payments for you. This type of coverage is known as liability coverage.

What HO-4 Insurance Covers

A typical HO-4 renters insurance policy covers named perils. Named perils include incidents specifically listed on your insurance policy. Here’s what a standard HO-4 policy covers:

  • Fire

  • Lightning

  • Windstorm

  • Hail

  • Riot or civil commotion

  • Malicious mischief

  • Aircraft

  • Vehicles

  • Smoke

  • Theft

  • Vandalism

  • Volcanic eruption

  • Falling objects

  • Weight of ice, sleet, or snow

  • Accidental tearing, cracking, burning, or bulging

  • Freezing

  • Damage from an artificially generated electrical current that’s sudden or accidental

  • Water damage due to accidental discharge or overflow of water

HO-4 insurance coverage is designed for personal property including your belongings like furniture, clothing, and electronics. Always check your policy for more information.

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What Is Excluded on an HO-4 Policy

There are, of course, exclusions to any broad form of home insurance policies. Renters insurance is no exception. Your HO-4 insurance policy will not cover your dwelling’s structure or the other buildings on the property. You don’t own the structures on the property, so your landlord should have a proper homeowners insurance policy.

Along with that, your HO-4 insurance only includes covered perils listed on your policy. So, if it’s not listed, it won’t be covered. Here are some standard exclusions on HO-4 insurance:

Earthquakes and floods

Like a standard home insurance policy, a renters insurance policy won’t cover losses due to earthquakes or sinkholes. Also, your HO-4 policy won’t cover water damage from backed-up sewage or flooding. It will be up to you to purchase separate earthquake insurance or flood insurance. If you live in a disaster-prone area, it may be necessary.

Your medical expenses

Liability insurance is designed to pay for medical expenses when someone not living in the home becomes injured. It won’t pay for personal medical bills. So, if you fall down the stairs of your rental home, you will have to use your health insurance or separate medical payments coverage.

How to Choose the Best Renters Insurance Policy

If you rent, it is worth buying an HO-4 insurance policy. Depending on the insurance company, you may get additional protection on top of everything else. Loss of use coverage is sometimes included and can help pay for your temporary additional living expenses. This type of coverage is useful when you must live elsewhere due to a covered loss, like a windstorm that takes the roof off your rental home.

Pro tip: always document your personal property, such as expensive electronics, antiques, and musical instruments. Depending on the type of coverage, it will come in handy when your insurer replaces your things. Your coverage will either be based on replacement cost or actual cash value. The difference between the two types? Replacement cost covers the cost of an item’s original value. Actual cash value covers an item’s original value minus depreciation,  resulting in a lower payout or reimbursement from your insurer. When you can, always opt for replacement cost coverage in case you have to replace your things.

When you go to buy rental insurance coverage, you must consider your individual needs. You may travel often, and a policy that includes personal property coverage on your belongings when you stay in a hotel may be ideal. Working from home is more common nowadays, too. You may have expensive computers or other electronics. Having the right amount of coverage on your HO-4 insurance policy would be best.

Your insurer may offer additional coverages on high-end computers or identity theft protection. Because most optional coverages like these don’t increase your rate, opting in may be worth it to cover your valuables’ extra costs. Alternatively, you can schedule your high-value belongings. When you schedule your valuables, you are getting those items full-value coverage. So, if your diamond bracelet is stolen, you won’t reach your coverage limits trying to replace it.

HO-4 Insurance Costs Are Relatively Low

Renters insurance costs much less than the standard homeowners insurance policy. When it comes to HO-4 insurance costs, it will boil down to where you live and the amount of coverage to fit your needs. It’s pretty standard to receive a quote with $25,000 in personal property coverage and $300,000 in personal liability coverage. Always consider the amount of coverage before you go to purchase a policy. Taking an inventory of your personal property and how much it would cost to replace your belongings will also help. When you add the costs, you’ll be able to determine how much personal property coverage is right for you.

Your renters insurance policy will likely cost somewhere around $20 per month or less. If you need to increase policy limits, it’s often not much of a price difference and is worth it if you have specific needs. Additionally, you can combine renters insurance with auto insurance at a lower price. This practice of combining insurance policies under one insurance company is known as bundling. Most top insurance companies offer to bundle and often provide you to do so right on their websites.

It helps to shop around and compare many insurance companies. Always weigh your deductible against your premium to ensure you’re getting the best coverage and price available. Remember, when your deductible is higher, your premium will be lower. When your deductible is lower, your premium will be higher. If you set your deductible too high, you may not be able to afford filing a claim.

Additionally, you can get discounts for having security systems and fire alarms. Check with your insurer to see if they offer special discounts for these things.

Always get insurance quotes from the best insurance companies to fit your needs before you buy. An easy way to compare and save is to use Insurify’s home insurance comparison tool. You’ll get a free quote delivered to your email in just seconds without having to scour the internet.

Frequently Asked Questions - Fireplace Safety

  • An HO-4 policy (a.k.a. renters insurance) works by protecting a renter's personal property. It also covers personal liability. You can rent any home: a townhome, a condo, a single-family residence, or an apartment. When things are stolen or damaged in your rental home, renters insurance will help pay to repair and replace your items. When someone is injured in your home, renters insurance will help pay for your legal fees and the other person's medical payments.

  • Renters insurance is relatively cheap compared to other insurance. The cost all depends on where you live and the coverage amounts. Expect to pay anywhere from $10 to $30 a month. And remember, the monthly cost is lower when you bundle insurance products.

  • HO-4 insurance is known as renters insurance. People who rent from a landlord (known as a tenant or renter) are covered on an HO-4 insurance policy. The landlord's property and building structures on the property are covered on their separate insurance policy.

  • The difference is that an HO-4 policy is explicitly made for rentals. And an HO-6 policy is a type of policy specifically for condo owners. Condo insurance helps protect dwellers in the event of damage to the interior of their unit.

    Conclusion: Is HO-4 Insurance Necessary?

    If you rent your home from a landlord, HO-4 insurance (a.k.a. renters insurance) is necessary. If a covered peril damages or destroys your belongings and you’re not covered, you won’t get a reimbursement. You’ll be stuck paying for new items on your own. What’s worse is, if someone outside your household becomes injured in your home, you would be on the hook. You would be responsible for paying potentially thousands of dollars in legal fees and medical expenses out of pocket. For such a low monthly cost, it only makes sense to buy renters insurance.

    For all your home insurance needs, there’s one place to go- Insurify . You can view the best home insurance comparison sites and get a quote instantly. It’s that easy!

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Stephanie Shaykin
Stephanie Shaykin

Insurance Writer

Stephanie Shaykin is a seasoned writer and marketing professional with experience in real estate. With a true passion for brand storytelling and SEO, she breaks down the most complex copy into a pleasant experience for the reader. In her spare time, she enjoys creating art and cooking in her home base of Chicago, Illinois.

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