The HO4 insurance policy is most commonly referred to as renters insurance. Whether you rent a home, condo, townhome, or apartment, if you purchase insurance, you most likely have HO-4 insurance. Regardless how it’s spelled (HO4, HO 4, HO-4, H04) it always means the same thing – insurance for people who rent the property they live in.
HO4 Renters Insurance Policy
HO4 Renters Insurance Covers Named Perils
The HO4 insurance policy is a named perils insurance policy. This means it covers all the stuff you own (your personal property) for damage caused by perils that are named – or listed – in your policy.
If an event causes damage to your personal property, and that event is listed in your policy as being a covered peril, good news: it’s covered under the policy! If it’s not, you’re out of luck.
HO4 Insurance Named Perils List
The H04 renters insurance policy lists 16 perils as named perils. The following list shows what is considered a named peril in a standard HO4 policy:
Three of the named perils above are only covered if the damage is caused as a result of a sudden and accidental event. Those are (1) the discharge and/or overflow of Water or Stream, (2) Cracking, Bulging, Burning or Tearing Apart, and (3) Artificially Generated Electrical Current.
Other than that, if a peril from the list above damages your stuff, the HO4 insurance policy should cover it.
Renters Insurance Covers Personal Property
HO4 policies insure your stuff, or personal property. Personal Property coverage on the HO-4 is broad; it should extend to all of the belongings a person owns. If your H04 insurance policy has $50,000 in coverage, it means you have a maximum limit of $50,000 that can be used towards replacing damaged or stolen belongings.
In addition to your Personal Property, most HO4 renters insurance policies will give you Liability insurance and Medical Payments to Others insurance. Liability insurance provides extra protection for legal situations you may find yourself in, and Medical Payments provides a small amount of insurance for minor accidents that occur on the property to people who don’t live on the premises.
Renters Insurance Does Not Cover Dwelling
The HO4 insurance policy does not provide any coverage for the Dwelling (the physical structure or building you live in) or Other structures (other buildings on the property). Since renters do not own the places they rent, they are typically not responsible for damage to the dwelling they live in (unless they are the direct cause).
HO-4 renters insurance policies also do not cover Loss of Use, which under a standard HO policy is used to pay for alternate living arrangements (like hotels, extended stays) while the dwelling gets repaired from a covered peril.
HO4 Insurance is Usually Replacement Cost
The HO4 home insurance policy is normally written as a Replacement Cost policy rather than an Actual Cash Value policy.
Replacement cost coverage simply means that if anything needs to be replaced, it will be replaced with brand new materials at today’s cost, regardless what the material was worth at the time it was destroyed.
For example, if your house burns down, replacement cost policies should cover the home to be rebuilt with brand new lumber at today’s prices.
Actual cash value policies depreciate the value of the material that was damaged before paying out on claims. This means you could be hit with a substantial payout.
While H04 renters insurance policies are typically replacement cost, be sure to check with your agent before moving forward with this policy.
