What Is an HO-4 Insurance Policy?

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Different structures and situations require different types of insurance. HO-4 insurance, or renters insurance, is one of them. Renters insurance provides coverage for your belongings and liability protection while renting an apartment, condo, or home.

Here’s what an HO-4 insurance policy covers, how much one typically costs, and whether this type of policy makes sense for you:

What is HO-4 insurance?

HO-4 insurance is standard renters insurance, and it helps protect your personal belongings against the following 16 perils (events that can cause damage to your property):

  • Fire or lightning
  • Windstorm or hail
  • Explosion
  • Riot or civil commotion
  • Damage caused by aircraft
  • Damage caused by vehicles
  • Smoke
  • Vandalism or malicious mischief
  • Theft
  • Volcanic eruption
  • Falling object
  • Weight of ice, snow, or sleet
  • Overflow of water or steam from plumbing, air conditioning, heater, etc.
  • Sudden damage from the hot water heating system, air conditioner, heater, fire-protective system, etc.
  • Freezing of plumbing, heating, household appliances, pipes, etc.
  • Damage from electrical currents, etc.

Additionally, renters insurance includes personal liability coverage for any damage you or your dependents cause to others.

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What does HO-4 insurance cover?

Your landlord likely has homeowners insurance that protects the building in the event of a fire, windstorm, or another qualifying catastrophe. But that coverage typically doesn’t extend to your personal belongings if they’re destroyed, or your living expenses if you’re forced to move.

Renters insurance can provide a financial safety net when disaster strikes. Generally, HO-4 insurance provides these three coverages:

  • Personal property: Most insurers should cover you for personal property damage resulting from qualified perils. If your clothes, electronics, furniture, or other belongings are damaged, lost, or stolen, your insurance provider will reimburse you for them, up to the limits of your policy.
  • Liability: If someone is hurt in your apartment, HO-4 insurance will cover their medical bills and any legal fees if they take legal action against you. Renters insurance also covers you if you damage a visitor’s property.
  • Additional living expenses (ALE): ALE is another term for loss of use coverage that covers you when the property you’re renting becomes uninhabitable due to a covered peril. If you’re forced to move, renters insurance can reimburse you for additional living expenses, such as hotel bills, restaurant meals, and other expenses.
Keep in mind: Just like other types of insurance your renters insurance policy will come with coverage limits and a deductible — an amount you’ll have to pay out of pocket before your insurance kicks in to pay a claim.

What does HO-4 insurance exclude?

Your renters insurance policy won’t cover you for the following:

Coverage type Not covered
Personal property Personal belongings whose value exceeds policy limits
Liability Liability coverage above your coverage amounts
Additional living expenses Structural damage to your rental building

Additionally, here are a few common events most insurance companies don’t cover with their renters insurance:

  • Flooding, earthquakes, and other natural disasters: Some natural disasters are non-covered perils in a renters insurance policy. You may be able to purchase additional insurance coverage as necessary. For example, you can enroll in a separate flood insurance policy from the National Flood Insurance Program.
  • Theft of or damage to luxurious items: The value of expensive jewelry, art, and collectibles may exceed your HO-4 coverage limits. Consider purchasing a rider to your renters insurance policy if you want to cover these items for what they’re worth.
  • Structural damage to your rental building: Your landlord’s insurance will cover damage to the building. But it’s wise to carry liability coverage in case your landlord sues you for the damages.

How much do HO-4 insurance policies cost?

The average annual cost of HO-4 insurance in the U.S. was $174 in 2019, according to the National Association of Insurance Commissioners (NAIC), which averages out to $14.50 per month for renters insurance.

Several factors determine the amount you’ll pay for renters insurance. Location is a primary factor. Other contributing factors include the amount of coverage you purchase, your deductible amount, and your claims history.

How much does an HO-4 insurance policy cost by state?

Where you live is the most important factor when it comes to the cost of renters insurance. Expect to pay more if you live in a city or high-crime area.

Premium rates vary widely from state to state as well. For example, Mississippi renters pay the highest average premiums at $252 per year, according to the NAIC, while North Dakota renters have the lowest premiums at $115 annually.

With that in mind, here are the average annual and monthly premiums for renters insurance in every state, according to NAIC data:

State Average annual premium Average monthly premium
Alabama $219.0 $18.25
Alaska $182.00 $15.16
Arizona $164.00 $13.16
Arkansas $208.00 $17.33
California $175.00 $14.58
Colorado $159.00 $13.25
Connecticut $183.00 $15.25
Delaware $153.00 $12.75
Florida $180.00 $15.00
Georgia $209.00 $17.41
Hawaii $174.00 $8.28
Idaho $148.00 $12.33
Illinois $157.00 $13.08
Indiana $164.00 $13.66
Iowa $132.00 $11.00
Kansas $167.00 $13.91
Kentucky $162.00 $13.50
Louisiana $236.00 $19.66
Maine $149.00 $12.41
Maryland $157.00 $13.08
Massachusetts $186.00 $15.50
Michigan $182.00 $15.16
Minnesota $135.00 $11.25
Mississippi $252.00 $21.00
Missouri $173.00 $14.41
Montana $149.00 $12.41
Nebraska $144.00 $12.00
Nevada $179.00 $14.91
New Hampshire $146.00 $12.16
New Jersey $156.00 $13.00
New Mexico $186.00 $15.50
New York $185.00 $15.41
North Carolina $159.00 $13.25
North Dakota $115.00 $9.58
Ohio $163.00 $13.58
Oklahoma $235.00 $19.58
Oregon $158.00 $13.16
Pennsylvania $153.00 $12.75
Rhode Island $182.00 $15.16
South Carolina $182.00 $15.16
South Dakota $117.00 $9.75
Tennessee $189.00 $15.75
Texas $220.00 $18.33
Utah $149.00 $12.41
Vermont $151.00 $12.58
Virginia $149.00 $12.41
Washington $157.00 $13.08
Washington, D.C. $158.00 $13.16
West Virginia $185.00 $15.41
Wisconsin $127.00 $10.58
Wyoming $147.00 $12.25

How does an HO-4 policy differ from other policies?

Generally, insurance companies that provide homeowners insurance offer renters insurance as well. What’s more, insurance policies and homeowners policies are nearly identical. The main difference is that renters insurance doesn’t cover the actual building — your landlord’s homeowners insurance does that.

Also See: HO-3 vs. HO-5 Insurance Policy Comparison

HO-4 vs. HO-6 home insurance policies

An HO-4 policy is another term for renters insurance, which covers your personal belongings and provides liability coverage while living in a rented property. By contrast, an HO-6 policy is a type of homeowners insurance for condominium and co-op unit owners.

Like renters insurance, HO-6 policies cover your belongings and give you liability protection, but HO-6 insurance goes a step further by insuring the structural parts of the building that you own (i.e., the interior of the unit). Both policy types cover additional living expenses and protect you against all 16 perils.

Who needs an HO-4 insurance policy?

You may need to get an HO-4 insurance policy if your landlord requires it. Otherwise, you only need renters insurance to protect your things. Since you don’t own the building, you don’t need to purchase a homeowners insurance policy.

If you have valuable items that may be hard to replace, such as heirlooms, jewelry, and watches — you may need to buy additional coverage as standard renters insurance policies often don’t provide high enough coverage limits for these items.

Learn More: Is Homeowners Insurance Required?

How much HO-4 insurance do you need?

You’ll want to make sure you have enough renters insurance to cover your possessions, liability, and additional living expenses after a covered event.

  • Personal possessions: You’ll want enough coverage to replace all your belongings when a covered disaster strikes. Create a home inventory that lists the value of all your possessions, including furniture, appliances, electronics, clothing, bedding, and more. You may need to purchase additional coverage — also known as an endorsement or rider — to cover high-value items.
  • Liability: Some insurance experts advise purchasing $300,000 or more of liability protection. You might also consider an umbrella policy with premiums that range from $200 to $350 annually for $1 million worth of liability protection.
  • Additional living expenses: Calculate how much hotel, restaurant meals, laundry, and other living expenses might run you if your rental becomes uninhabitable after a covered event. Keep in mind, ALE coverage is usually worth around 30% of your policy’s personal property coverage.

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About the author
Tim Maxwell
Tim Maxwell

Tim Maxwell is a financial writer with over two decades of experience. Tim’s work has appeared in USA Today, Washington Post, Bankrate, LendingTree, Fox Business, Credible and more. He also publishes Incomist, a personal finance site that focuses on paying off debt by earning extra income in creative ways.

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