What Is HO-4 Insurance?

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ByMark Fitzpatrick
Edited byRae Osborn
ByMark Fitzpatrick
Edited byRae Osborn

Updated: May 22, 2024

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HO-4 insurance, or renters insurance, protects tenants and their belongings in the event of unexpected disasters or incidents, providing peace of mind for those who live in rented spaces such as a house, apartment or condo unit. In essence, HO-4 is designed to cover the renter’s personal property, liability coverage and loss of use coverage.

As a renter, understanding what HO-4 insurance involves, what it doesn’t cover, how much HO-4 insurance is and where you can find a policy is essential to begin protecting your finances.


What Does HO-4 Insurance Mean?

HO-4 insurance or renters insurance is a financial safeguard for individuals who lease their homes or apartments. It provides coverage for personal belongings and offers liability protection in case of unforeseen events. Take a look at each coverage included in HO-4 insurance:


Personal Property Coverage

This helps reimburse you for the loss or damage to your belongings due to covered perils such as fire, theft, vandalism, or natural disasters. Whether it's your electronics, furniture or clothing, this coverage ensures that you can recover their value when they’re damaged or stolen due to a covered peril.

Liability Coverage

This protects you if you're found legally responsible for causing injury to someone or damaging their property while on your rented premises. It covers legal expenses, settlements, and judgments, offering financial security and legal assistance.

Medical Payments Coverage

It pays for the medical expenses of individuals injured on your property, regardless of who is at fault. It helps cover minor injuries, medical bills or ambulance fees, reducing the likelihood of costly lawsuits.

Loss of Use Coverage

It helps if your rental becomes uninhabitable due to a covered peril, such as fire or storm damage and covers additional living expenses. It can pay for temporary accommodation, food and other essential costs, ensuring that you're not left financially strained while your residence is being repaired or rebuilt.

In essence, HO-4 insurance is a comprehensive package to protect renters from various unforeseen circumstances, making it an essential investment. HO-4 insurance doesn’t apply solely to your rented premises; it follows you wherever you go.

For example, suppose your bicycle is damaged while locked up outside a coffee shop. In that case, your HO-4 insurance can come to the rescue, demonstrating its versatility and value beyond the boundaries of your rented space. This extends the safety net of renters insurance to numerous aspects of your life, ensuring that unexpected mishaps don't leave you financially stranded.

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HO-4 insurance covers personal property, liability and loss of use, but it's important to note that these protections only come into play when a covered peril occurs. A covered peril refers to specific events or situations outlined in your insurance policy as eligible for coverage. Typically covered perils for HO-4 insurance include:

  • Fire and smoke damage
  • Theft
  • Vandalism
  • Windstorms and hail
  • Explosions
  • Riots and civil disturbances
  • Damage from aircraft or vehicles
  • Falling objects
  • Weight of ice, snow, or sleet
  • Certain types of water damage

Your policy may also specify additional covered perils or exceptions, so carefully reviewing your insurance documents is essential to understand the full scope of protection your HO-4 policy offers.

Actual Cash Value (ACV) vs. Replacement Cost Value (RCV) in Renters Insurance

In HO-4 policies, your belongings may be reimbursed at actual cash value (ACV) and replacement cost value (RCV). Most HO-4 policies reimburse your belongings at ACV, which gives you what your item is worth today, after years of use, while RCV pays out what it'd cost to buy a new equivalent item today. This choice can affect your claim payouts. For a clearer picture, here's a table breaking down ACV and RCV.

Actual Cash Value (ACV)
Replacement Cost Value (RCV)


ACV considers the depreciated value of your items from the original price in case of a claim. This is calculated based on the present worth of your property or possessions, considering depreciation over time.

RCV considers the quality and functionality of the item that needs to be replaced. It replaces your belongings with items of similar quality, disregarding depreciation.

Claim Payout

The claim payout for ACV is lower since it is based on the depreciated value of your belongings from their original price.

The claim payout for RCV is higher as it is based on the quality and functionality of your belongings, replacing them with newer ones.

How It Works

If your 7-year-old laptop was stolen, your policy would reimburse you for the current market value of the same make and model of your lost laptop. This may be lower than the original price because of depreciation.

If your 7-year-old laptop was stolen, your policy would reimburse you the cost of buying a new laptop with similar features regardless of the laptop’s original price when you bought it 7 years ago.

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If you have highly valuable items, you can enhance your coverage with scheduled personal property coverage. This add-on allows you to extend your policy limits to cover specific high-value items like jewelry, art or collectibles that may exceed the standard coverage limits.

What Isn’t Covered Under HO-4 Insurance?

While HO-4 insurance offers a protective layer, it doesn't shield against everything. For instance, earthquake and flood damages need separate policies. To get the most out of your insurance, always review its specifics and consider extra policies or additions for complete peace of mind. HO-4 insurance may not cover the following perils:


Review your policy and understand its limitations to ensure you have the appropriate coverage for your specific needs. If you have concerns about any of these excluded events, consider exploring additional insurance options or riders to fill potential gaps in your coverage.

Who Needs HO-4 Insurance?

HO-4 insurance is essential for anyone renting an apartment, condo unit or house. While it's not a legal requirement for tenants, landlords can require renters insurance as part of their lease agreements. However, even if your landlord does not mandate it, it's highly advisable.

Renters insurance provides valuable protection for your personal belongings and offers liability coverage in case of accidents or damage that you might be responsible for in your rented space. It's a smart investment for renters of all types, offering financial security and peace of mind in the face of unexpected events.

How Much Does HO-4 Insurance Cost?

For most renters, the cost of HO-4 insurance is quite affordable. For a policy providing around $20,000 in personal property coverage, you can expect to pay roughly $13 per month. However, rates can vary depending on various factors, such as your location, the coverage limits you choose, your deductible, and even your credit score. Look at the average cost of HO-4 insurance in the table below.

Personal Property Coverage Limit
Average Monthly Rate







Remember that the above rates are simply averages, and your premium can change depending on your circumstances. Thus, comparing renters insurance quotes is a smart strategy to find cheap renters insurance, especially since insurance providers calculate their rates differently and offer discounts. Opting for higher personal property coverage limits or add-ons like scheduled personal property coverage for valuable items can increase your premium.

Where Can You Buy HO-4 Insurance?

Most major insurance providers offer HO-4 policies, making it easily accessible for renters. You'll likely find numerous options if you prefer to work with well-known national insurers, regional carriers, or even online insurance platforms.

To purchase HO-4 insurance, you can contact insurance agents or brokers, visit insurance company websites to request quotes and information or explore online platforms that allow you to compare policies and rates from various providers. Evaluating different insurance companies, their coverage options, premiums, and customer reviews is essential to find the best fit for you.

Take a look at the average rates for each national provider and see how rates change:

Monthly Rate



State Farm








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You can purchase HO-4 insurance by getting a quote from the insurer online, working with a local insurance agent or even mailing an application, depending on the provider.


Understanding what HO-4 or renters insurance covers and what’s excluded is essential. Learn more about HO-4 or renters insurance through our answers to some of the most frequently asked questions.

What is HO-4 insurance?
What is the best renters insurance company?
How much renters insurance do you need?
Does renters insurance cover pets?
Does renters insurance cover belongings outside of your home?

About Mark Fitzpatrick

Mark Fitzpatrick headshot

Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.