You may know that homeowners insurance is highly recommended by most financial experts for those who own their own homes, but what if you’re a renter? Although your home’s structure is likely covered by your landlord’s insurance, you may need a renters policy, or HO-4 insurance, to cover your personal belongings, liability and additional living expenses. Bankrate’s insurance editorial team covers what HO-4 insurance is and who may benefit from it.


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What is HO-4 insurance?

HO-4 insurance is the technical term for renters insurance. While your landlord likely insures the physical structure of the building you live in, an HO-4 policy provides coverage for your personal possessions if they were to be damaged by a covered peril.

On top of that, HO-4 policies provide liability insurance. If someone is injured on or in your rental property and you are found negligent for their injuries, your policy may cover your legal expenses and any medical expenses you may be held responsible for. Liability coverage may also cover reimbursement for any visitor’s property that is damaged while at your residence.

Lastly, standard HO-4 policies also include additional living expenses (ALE) coverage. If your rental is uninhabitable while repairs are made after a covered loss, your insurance policy may pay for extra living expenses you incur. These might include hotel charges, restaurant meals and pet boarding costs.

What does an HO-4 policy cover?

A standard HO-4 policy covers 16 specific perils. That means if your personal property is damaged due to one of these events, your insurance company should reimburse you up to your coverage limits. Generally, damage caused by the following perils is covered by an HO-4 policy:

  • Fire or lightning
  • Windstorm or hail
  • Explosion
  • Riot / civil commotion
  • Damage from aircraft
  • Damage from vehicles
  • Smoke
  • Vandalism / malicious mischief
  • Theft
  • Volcanic eruption
  • Falling object
  • Weight of snow, ice or sleet
  • Overflow of water or steam from plumbing, HVAC, etc.
  • Sudden breakage of a hot water heater, etc.
  • Frozen pipes
  • Electrical currents

If a covered peril occurs and your belongings are damaged, you can file a claim with your insurance company. Most HO-4 policies include a deductible that you will have to pay before your insurance company pays to replace or repair any damaged items up to your coverage limits.

HO-4 policy exclusions

In general, HO-4 policies do not cover damage caused by certain perils, including:

  • Flood
  • Earthquake
  • War
  • Nuclear accident
  • Mudslide
  • Sinkhole

Your policy may include additional exclusions, so you’ll likely want to read the paperwork carefully or speak with your insurance agent to review your policy. If you live in an area that’s prone to an excluded peril, you may want to consider adding an endorsement to your policy or getting a standalone insurance policy. For example, you may benefit from earthquake or flood insurance depending on where you live.

Who needs HO-4 coverage?

HO-4 coverage is designed for renters in a variety of home types. These policies may apply if you rent an apartment, condominium or house. While renters insurance is not a legal requirement, many landlords will require you to carry a policy and could mandate a minimum limit of liability coverage. You’ll likely want to read your rental agreement carefully to make sure you’re fulfilling your legal responsibility with the right amount of coverage. Even if an HO-4 policy isn’t required, it still may be smart to have one in place to financially protect yourself.

To determine how much rental coverage you need, it may be helpful to determine the value of your personal property and your relative level of liability risk. You may want to start by creating a home inventory to estimate the value of your possessions. You also may want to consider your liability exposure. Do you have a pet that could potentially hurt someone? Do you host guests often? Working with a licensed agent may help you decide how much coverage is appropriate for your needs.

Where can I get HO-4 insurance?

HO-4 insurance is widely available through many insurance companies, including national, regional and local carriers. Many carriers offer online quoting for HO-4 coverage. Comparing multiple carriers before choosing a policy may help you find the coverage you need at a competitive price.

During the shopping process, you may also want to look for relevant coverage options and discounts. One easy way to potentially save is by asking if your auto insurance company offers a bundling discount for HO-4 policyholders. You may also save by paying your premium in full, installing protective devices or looking for affiliation discounts.

How much does HO-4 insurance cost?

According to the Insurance Information Institute, the average annual premium for renters insurance in the U.S. is $174 per year. That means, on average, it could cost just about $14.50 per month for a standard HO-4 policy.

The price of your renters insurance policy depends on certain contributing factors. Your state plays a large role in your premium. For example, renters in South Dakota pay an average of $117 per year for renters insurance, while renters in Mississippi pay $252 per year, on average. Additional factors that influence your premium include your claims history, how much coverage you purchase and your deductible level.

Frequently asked questions

    • Yes. HO-4 insurance is the same thing as renters insurance. The coverage may also be called tenant insurance with some carriers. HO-4 insurance may be the right policy type for you if you rent the dwelling you live in.
    • The best company for your needs may be different from the best company for someone else. Everyone has different needs when it comes to renters insurance coverage. Understanding what you are looking for — like the lowest price, a certain coverage or particular discounts — and getting quotes from several carriers might help you find the company that is right for you.
    • Most insurance experts recommend you have enough coverage that you would be able to replace all of your personal possessions if they were damaged, destroyed or stolen. One way to determine this number is to do a home inventory, listing your belongings, along with information including date of purchase, serial numbers, any appraisal documents and receipts, if you have them. It may also be helpful to take photos of your belongings to save with the inventory. Additionally, you may want to consider your potential liability exposure and the cost of living in your area to determine how much liability and additional living expenses coverage you may need.
    • It depends. Renters insurance may cover your pet for liability if your animal injures a guest or causes damage to a guest’s property. However, it’s important to note that exotic animals and certain dog breeds are often excluded from coverage with certain property insurers. If you have one of the animals that is typically excluded from coverage, you may have to spend some extra time looking for a company that is willing to extend liability coverage to you. However, renters insurance does not cover medical fees for your animal. For that, you would likely need pet insurance, which is essentially health insurance for your animal.
    • Your renters insurance policy may cover theft if items are stolen out of your locked vehicle or a hotel room. However, your coverage limits likely do not extend to high-value items, like jewelry. For specifics, you may want to check with your insurance company on what may or may not be covered by your policy.