An HO-4 insurance policy is sophisticated insurance talk for a renters insurance policy. There are seven homeowner policies (H01, HO2, HO3, HO4, HO5, HO6, and HO8), but only one of the homeowner policies are designed for renters — the HO4 policy. HO-4 policies can only be bought by renters.

What does an HO-4 policy cover?

HO4 insurance policies, or renters insurance, are policies that protect renters against damages to their personal property in a rented home or apartment that is directly caused by a list of perils and addresses their personal liability. As well as insuring the renter's personal property, these policies may also provide some liability and medical payments coverage.

Here are the 16 perils typically included in HO-4 insurance coverage:

1. Lightning or fire
2. Hail or windstorm
3. Explosion
4. Riot or civil commotion
5. Damage caused by aircraft
6. Damage caused by vehicles
7. Smoke
8. Vandalism or malicious mischief
9. Theft
10. Volcanic eruption
11. Falling objects
12. Weight of ice, snow, or sleet
13. Overflow or accidental discharge of steam or water from an appliance, heating, plumbing, air conditioning, or automatic fire-protective sprinkler system.
14. Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning, or automatic fire-protective system.
15. Freezing of a heating, air conditioning, plumbing, or automatic, fire-protective sprinkler system, or of a household appliance.
16. Sudden and accidental damage from an artificially generated electrical current (not including loss to a tube, transistor, or similar electronic component).

HO-4 insurance pays for replacing your property in case it's stolen or damaged by a covered incident. It also includes legal expenses when someone is injured on your rental property or you damage their property. Lastly, it will pay for medical expenses in case you're responsible for the injuries of your guests.

What are coverages in HO-4 policies?

Personal property: Damage to personal property caused by the above perils will typically be covered in the HO-4 policy.

Liability coverage: An HO-4 policy sometimes covers more than just personal property for renters. If a legal situation arises, such as the renter being sued for an injury that occurred on their property, the insured gets this extra protection from the HO-4 policy. Liability coverage is sometimes available at an extra cost.

Medical payments: Some renters insurance policies provide coverage for injuries suffered by people who aren’t covered or who don’t live on the premises of the insured. This is sometimes available at an extra cost.

What is not covered in the HO4 insurance policy?

The renter can’t submit a claim if the damage is not caused by any of the perils listed in the policy.

The dwelling and any structure within the premises of the property are not covered by the HO4 insurance policy, as the property is only rented. Dwelling damages can be covered by other HO policies that the owner of the property is entitled to.

The HO-4 policy does not cover any repair work of the property, building, or structure built within the premises because those are the responsibilities of the owner (and not the renter). If a renter is forced to relocate or stay in a hotel because of damage to the dwelling, the policy will not cover temporary living expenses such as his or her hotel charges.

What about actual cash value vs. replacement cost?

An HO-4 insurance policy can either be an actual cash value or a replacement cost policy, and the renter must be fully aware of what each of these settlement types necessitates and what type of policy they have.

Actual cash value policy: While the cash value policy sounds exciting, it takes the depreciation value into consideration. So, if a TV set that cost you $1,500 four years ago is actually only worth $700 now, the company will only pay you $700 if the TV in your apartment is damaged or stolen in a covered incident.

Replacement cost policy: A replacement cost policy does not take the depreciation value into consideration and will pay you the entire amount you spent – albeit several years ago. So, if the same TV set from the previous example were damaged, you would be entitled to the full $1,500 spent originally to put toward a new television.

How can you get an HO-4 policy?

To get an HO4 policy, you need to find a company that sells renters insurance in your area. When finding a company to fulfill this, you’ll want to ensure the company has good rates and a good reputation.

To assist in your search for a renters insurance company for an HO-4, see which companies other renters recommend in your area with these renters insurance rankings.

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