What is an HO-4 insurance policy? (August 2025)

It is a named perils policy, also known as renters insurance. As the landlord insures the physical structure of the building you rented, an HO-4 policy will protect your personal belongings if they get damaged in specific situations.

Additionally, the majority of HO-4 policies frequently include liability insurance. For instance, it may pay your legal fees and any medical costs if someone gets hurt on or in your rental property and you are found to be at fault for their injuries. Also, any visitor property damaged while on your rental property may get reimbursement by liability coverage.

Who needs HO-4 insurance?

Anyone renting an apartment, condo, or house must buy HO-4 renters insurance. To protect themselves from liability for losses to personal property, landlords ask tenants to carry HO-4 insurance. More significantly, if a visitor gets hurt while visiting a tenant's property, a renters policy lessens the amount of legal responsibility a landlord must bear.

Renters insurance may also be necessary people who rent rooms in houses and college students who live in dormitories. A parent's home insurance policy may occasionally cover a student's possessions in a dormitory. However, HO-4 insurance is a moderately inexpensive extra layer of security, frequently costing less than $20 a month. In addition, students can get better coverage by getting a renters policy rather than relying on their parent's home insurance. For instance, they can change limits for personal items like computers and other electronic equipment.

Renters who live in an apartment or house with roommates must select whether they require a personal policy for themselves or a household policy that covers everyone. Typically, buying different insurance is the best option. However, the insurance cost can increase if more people are added to a single policy since the insurer risk increases. Rates also depend on each person's unique risk profile, which might vary from person to person and affect the cost of the joint coverage.

What does HO-4 insurance cover?

An HO-4 policy mainly offers three types of coverage.

Additional living expenses: It will pay for your temporary lodging and food when you get forced to leave your home due to a covered loss. Mainly, additional living expense coverage reimburses you for charges above and beyond your standard living costs. For instance, you can claim $1,500 in additional living expenses if your rent is $1,500 per month and an extended-stay hotel is $3,000 per month.

Personal liability: it will help you cover the medical costs if a visitor or guest gets injured while on your property. Suppose someone sues you because of an injury that happens in your rental property. In that case, personal liability insurance can also assist in covering your legal costs, such as lawyer fees and court costs.

Insurers normally provide default liability limits of $100,000 to $300,000, which frequently include $1,000 to $5,000 in medical costs coverage. If you require extra coverage, discuss increasing the limits with your insurer. Most insurers also provide personal umbrella policies, which pay for liability expenses above the coverage provided by your H)-4 policy.

Personal property: It will cover the replacement cost if one of the specified perils damages or destroys your personal property. Furniture, gadgets, and other possessions, such as clothing, will get coverage by personal property.

The insurance company does set limits on certain types of property. An insurer, for instance, can pay up to $2,500 for computer equipment and $1,500 for sporting goods. You may raise the limits with the majority of insurers, though. For additional protection, you might need to add a rider or endorsement for costly items like jewelry and musical instruments.

HO-4 insurance also covers 16 specific risks. Your insurer should reimburse you if one of these incidents damages your personal property. An HO-4 policy often covers harm brought on by the following perils.

• Lightning and fire
• Hail and windstorm
• Theft
• Smoke
• Vandalism
• Explosions
• Riots
• Damage by aircraft
• Damage by vehicle (not your own)
• Volcanic eruption
• Leak or overflow of water or steam
• Falling objects
• Weight of snow, ice, and sleet
• Damage from steam-heating/water-heating appliances/systems
• Freezing of plumbing, heating, and air conditioning
• Short-circuit damage by electrical appliances

How much does HO-4 insurance cost?

According to the Insurance Information Institute (III), the average annual premium for HO-4 renters insurance in 2019 was $174. That indicates that a typical HO-4 policy may cost you around $14.50 per month.

Your renters insurance policy's cost will vary based on several factors. Your state has a significant impact on your premium. For instance, renters in South Dakota shell out an average of $129 per year for an HO-4 policy, while those in Mississippi shell out an average of $264 annually. Your claims history, the cost of the coverage you purchase, and your deductible level are other factors that affect the cost of HO-4 insurance.

What does HO-4 insurance not cover?

An HO-4 policy does not cover your home or any other buildings on the property, in contrast to many other home insurance policies. In addition, because you do not own the structures as a renter, your landlord is responsible for obtaining insurance. Most HO-4 renters insurance policies won't cover your possessions or liability in the following situations.

Natural disasters: Most HO-4 insurance won't pay out for your possessions if a flood or an earthquake destroys them. If you reside in a region with extreme weather, you must buy extra riders and coverage.

Pest-related damage: Your HO-4 policy does not cover any losses brought on by pests. It applies to bed bugs, vermin, and rodents.

Rare and expensive objects: HO-4 insurance policies sometimes fall short in coverage for valuable items. There are specified coverage limits for items like rare jewelry or antiques, often as low as $1,000. If your possessions cost more than this, you must buy more coverage.

Medical expenses: An HO-4 policy's liability coverage will help cover medical costs if a guest gets hurt on your property, but not your medical expenses. You'll need to depend on your health insurance or other medical coverage if you want to cover the expenses.

Additionally, an HO-4 policy won't cover the damage caused by these perils.

• Landslide
• War
• Nuclear accident
• Mudslide
• Sinkhole

HO-4 policies: Actual Cash Value vs. Replacement Cost

Most HO-4 insurance policies also allow you to choose whether to insure your belongings at their replacement cost or real cash value. Here is the primary difference:

Replacement cost property coverage: When it pays out a claim, it does not deduct the depreciation from your damaged or stolen item's value. As a result, your claim settlement will typically be sufficient to enable you to replace your lost item with a comparable replacement item.

Actual cash value coverage: Depreciation is not deducted from your claim payment if you have this coverage. Suppose you spent $1,000 on a laptop a couple of years ago. Your insurance provider will probably perform the following computation to determine your payout.

R = ACV = (E - C) / E

Here, R stands for the item's replacement cost. E represents the item's anticipated lifespan. Finally, C and ACV denote the item's current life and Actual Cash Value, respectively. The actual cash value payout is as follows if the typical laptop has a lifespan of five years.

Payout = $1,000 x (5-2)/5 = $600

So, buying a new laptop will drain your wallet!

HO-4 vs. HO-3 policies

HO-3 insurance is the most common type of home insurance policy. It provides coverage for your home from damages due to open perils. It means you get protection from all losses except those excluded from your policy. However, it's crucial to remember that an HO-3 policy still provides 'named peril' coverage for your personal property.

An HO-4 policy is known as renters insurance. It is the best policy for someone who rents a home or an apartment. This insurance covers your liabilities and personal property up to the policy limits.

HO-3 vs. HO-4, HO-5, and HO-6 policies

An HO-5 policy offers more thorough protection than an HO-3 policy and is the most comprehensive type of home insurance. An important distinction between an HO-5 policy and an HO-3 insurance policy is that an HO-5 policy includes personal property in its coverage for open perils.

Under the HO-4 policy, also known as renters insurance, tenants get coverage. When you rent an apartment, your landlord is responsible for any perils that endanger the structure of the building. Condo owners get coverage from the HO-6 policy. The cost of unexpected repairs to their building's common areas or built-in property may not always be their responsibility.

When comparing HO-3 and HO-6 plans, an HO-6 does not give home coverage but does cover liability, personal property, and loss of use.

How is an HO4 policy different from other types of homeowners insurance?

HO-4 insurance is typically offered by the same insurers that offer homeowners insurance. Additionally, home insurance policies and insurance policies are very similar. The primary distinction is that your landlord's homeowners insurance covers the actual building, whereas HO-4 renters insurance does not.

How much HO-4 insurance do I need?

First, consider the level of protection you require before buying a policy. Following these steps, you can calculate how much personal property coverage you need.

• Make a list of your personal belongings.
• Find out how much each item would cost to replace.
• Add up all expenses to compute how much personal property insurance you require.

Your lifestyle may affect how much personal liability insurance you require. For instance, you might need to extend your liability coverage if your children like to host parties or playdates for their friends. It will offer protection against potential and unexpected events. Likewise, you probably need additional liability insurance if you prefer to host people for pool parties or barbecues.

How to get HO-4 insurance

Consider these factors before buying an HO-4 policy.

• Take an inventory: To determine the cost of each item, you should first itemize your possessions and take an inventory of them. It will help you to decide how much coverage you need and the overall cost of your belongings.
• Select a policy: You typically get two options from insurers: a replacement cost or a real cash value policy. The cost of replacing your things will be covered by the replacement cost policy. Actual cash value compensates for products at their depreciated worth.
• Consider the insurance premium: Your coverage limits and deductible amounts are only two examples of the factors that affect your premium. Of course, your premiums will be cheaper the bigger your deductible is.

How to get an HO4 insurance policy with Way.com

Like buying home insurance, getting HO-4 insurance begins with shopping around. Obtaining many quotes from insurers and comparing their pricing, coverage levels, exclusions, and add-ons will help you choose the ideal policy for your requirements. To understand the exact cost of your renters insurance, you should also ask each insurer whether there are any discounts.

Are you planning to buy the most affordable HO-4 policy? Then use Way.com's app or website to find your area's perfect homeowners insurance policy at the most affordable rate. If you need further help, our home insurance agents can help you. They will make you understand the most complicated homeowners insurance rules, terms, discounts, and coverages. So, contact our agents in your area if you need the best renters insurance.

Looking for another type of homeowners policy? Here are the Seven different forms of homeowners insurance