What is an HO-4 insurance policy? | Coverage.com

People who rent apartments and houses need the protection that only a ho-4 insurance policy can provide. Commonly called renters insurance, an HO-4 policy can help protect you against the high cost of lawsuits, replace your personal belongings if they are lost due to damage or theft, and help pay your expenses if a disaster displaces you from your home.

Most landlords require renters to purchase renters insurance, which is often offered at a very affordable price by major homeowners insurance companies. Before you buy a ho-4 policy, it’s important to know what it covers, what it doesn’t cover, and the amount of protection you need.

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what is ho-4 insurance?

if you rent an apartment or a house, the landlord’s insurance policy only covers the structure; A renters insurance policy is what protects your personal belongings. An HO-4 renters policy provides “designated perils” coverage, meaning the terms of the policy define the type of calamities it will cover. the term “hazard” refers to the type of force or incident that causes a loss.

ho-1, ho-2, and ho-3 homeowners insurance policies provide protection for people who own their homes. ho-2 and ho-3 policies cover losses caused by 16 perils, including:

• accidental overflow of water or steam
• accidental and sudden burns, cracks or breakage of home systems
• planes
• riots and civil unrest
• explosions
• falling objects
• fire and lightning
• freezing
• hail and wind storms
• surges
• smoke
• theft
• vandalism
• vehicles
• volcanic eruptions
• weight of ice, sleet and snow

an ho-4 policy covers the same 16 risks as ho-2 and ho-3 policies when it comes to your personal property. therefore, if your personal belongings are stolen in a burglary or destroyed by fire or windstorm, your renters insurance policy should pay for your losses. Likewise, if your rental home’s hot water tank suddenly bursts and the water destroys a sofa or oriental rug, you can file a renters insurance claim to help pay for the cost of replacing your property.

who needs ho-4 insurance?

Anyone who rents an apartment, condo, or home needs renters insurance. Landlords require renters to carry renters insurance to relieve them of liability for personal property losses. More importantly, a renters policy reduces the amount of legal liability a landlord must bear if a guest is injured in a tenant’s home.

College students who live in dorms and people who rent rooms in houses may also need renters insurance. In some cases, a parent’s homeowners insurance can protect the belongings of a student living in a dorm. Still, renters insurance is pretty cheap extra protection, often less than $20 a month.

Instead of relying on their parents’ home insurance coverage, students can get better coverage by purchasing a renters policy, as they can adjust limits for personal items like computers and electronics.

Renters who share an apartment or house with roommates need to decide if they need a separate renters policy or one that covers everyone in the household. it is usually better to buy separate policies. adding multiple people to a single policy can increase the premium, because it increases the insurer’s risk. Rates are also based on each individual’s risk profile, which may be higher or lower between individuals and would affect the joint policy premium.

what does ho-4 insurance cover?

Most standard ho-4 policies include three types of coverage:

additional living expenses

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Additional living expenses coverage can help pay for temporary lodging and meals when you are displaced from your home after a covered loss. In most cases, additional living expenses coverage reimburses you for costs that exceed your normal living expenses. For example, if you pay $1,500 per month for rent and an extended-stay hotel costs $3,000 per month, you can file a claim for additional living expenses of $1,500 (less your final payment amount deductible).

personal responsibility

If a visitor or guest slips and falls in your home, personal liability coverage can help pay for the medical bills incurred. Personal liability coverage can also help pay your legal expenses, including attorney fees and court costs, if someone sues you for an injury that occurs in your rental unit.

Insurers typically offer predetermined liability limits ranging from $100,000 to $300,000, often including $1,000 to $5,000 in medical payments coverage. if you need more coverage, talk to your provider about increasing the limits. Most companies also offer general personal policies, which cover liability costs that exceed your renters insurance limit.

personal property

When a covered peril damages or destroys your personal belongings, your personal property coverage can help pay to replace them. Personal property coverage can help pay for possessions like clothing, electronics, and furniture.

Insurers set limits on certain types of property. for example, a provider can only pay up to $2,500 for computer equipment or $1,500 for sports equipment. however, most carriers will allow you to increase the limits. For expensive items, like jewelry and musical instruments, you may need to add a rider or endorsement for added protection.

what does ho-4 insurance not cover?

Standard renters insurance policies provide basic protection. most carriers offer optional coverages and allow you to increase limits. however, ho-4 policies will not cover the following:

earthquake and flood damage

Most renters insurance policies do not cover losses caused by earthquakes and floods. however, policies for these can often be purchased separately. Although earthquake and flood insurance are optional coverages, they are important to have if you live in an area prone to these types of disasters.

structural damage

homeowners policies include coverage for dwellings and other structures to pay for structural damage to the home or unattached structures, but ho-4 policies do not, as they pertain only to the policyholder’s belongings .

If a covered peril destroys your rental unit, the landlord’s property insurance must pay for the repairs. Some renters policies provide a certain amount of coverage to pay for changes you’ve made to your rental home. For example, if you installed designer wallpaper in your dining room, your renters insurance can help replace it after a covered loss.

your medical expenses

The personal liability coverage in a ho-4 policy will help pay for medical expenses if someone outside your household is injured in your apartment, but it will not pay for your personal medical bills. if you fall down the stairs, you’ll need to rely on your health insurance or separate medical coverage to cover the costs.

how much ho-4 insurance do i need?

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Getting a renters insurance quote online is fairly easy with most major insurers. Requests for quotes generally set predetermined limits for personal liability and personal property coverages. for example, you may receive a quote that provides $25,000 in personal property coverage and $300,000 in personal liability coverage.

Carefully consider the amount of coverage you need before purchasing a policy. Determining the amount of personal property coverage you need takes just a few simple steps:

• take an inventory of your personal property.
• determine how much each item would cost to replace.
• add up all the costs to determine the amount of personal property coverage you need.

Determining the amount of personal liability coverage you need may depend on your lifestyle. If you have children who like to have friends over for play dates or sleepovers, you may need to increase your liability coverage to protect against potential accidents. Likewise, if you like to host guests for cookouts or pool parties, you probably need more liability protection.

choosing a ho-4 insurance policy

Most standard ho-4 policies pay the depreciated value of your personal property. For example, if you buy a sofa for $1,000 and it is destroyed in a fire five years later, the insurer will likely only pay you a few hundred dollars to replace it.

However, providers often offer optional replacement cost coverage, which pays to replace your personal belongings at current market prices. Adding replacement cost coverage will increase your premium, but it means you’ll pay much less to replace any damaged or stolen items in the future.

When shopping for renters insurance, consider your unique needs. If you travel often, look for a policy that protects your personal belongings when you stay at a hotel. People who work from home should also consider the amount of coverage a renters insurance policy provides for items like expensive electronic equipment.

Also consider the optional coverages offered by your insurer. Optional coverages may include additional protection for computers and smart devices, identity theft protection, and programmed personal property coverage for your most valuable possessions, such as art and collectibles. many optional coverages don’t significantly increase your rate and are worth the additional cost of your high-value items.

the takeaway

• ho-4 insurance policies cover the same risks as most homeowners policies.
• Standard renters policies include additional living expenses, personal liability, and personal property coverage.
• ho-4 policies do not include housing and other structures coverage.
• Insurers allow you to increase renters insurance limits and offer optional coverages for valuable items.
• ho-4 policies are affordable and a must have for anyone renting an apartment, condo or house.

Depending on where you live and how much coverage you need, you can often buy a renters insurance policy for $20 a month or less. An HO-4 policy covers property losses from the same types of disasters as most home insurance policies, perils like fire, hailstorms, and vandalism.

Standard HO-4 policies provide liability protection, pay to replace your personal belongings, and help pay your living expenses if you need to move out of your rental home after a covered loss.

Policy limits can usually be increased to meet your needs, and many providers sell blanket policies to increase your liability or high-value item protections.

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