Ho-4 Policy

Anthony Mittan

HO-4 Policies

Insurance and Risk

March 6, 2009

A Lifesaver at Hand: Renters Insurance

Jason, a new resident of 616 North Buchanan Street, could not wait until him and his roommate Nick could be settled into their very own apartment. For Jason, this was the first time he would actually be living in his own place, away from campus, away from parents. Although Jason had been repeatedly told to consider renters insurance, he simply blew it off, as most college students would. His mother, however, was a bit smarter and purchased basic renters insurance on his behalf. At midnight on May 1, 2008, fire broke out, burning down part of apartment complex and many of Jason and Nick’s belongings. How much will insurance cover in this situation? How much will Jason be required to pay? The answer to these questions and more will be addressed as we look at a very common type of homeowners policy known as renters insurance.

The history of homeowners insurance dates back prior to the 1950’s, a time when all policies were written to cover only one type of accident, such as fire [ (InsuranceSalesman.com) ]. If a person wanted additional coverage against other types of dangers, such as theft, they would have to purchase another, separate plan to cover it. Later that decade many insurance companies began to write policies that covered multiple threats.

It wasn’t until the 1970’s, when a small New Jersey company started writing multiple types of homeowners insurance policies, that renters insurance came into existence. After years of working out the “kinks” associated with insuring several types of homeowners policies, the system of writing insurance simplified [ (InsuranceSalesman.com) ].

Renters insurance or, as I will commonly use, an HO-4 policy, provides coverage of items in a household, personal belongings, additional living expenses, personal liability for negligence, and medical payments due to non-negligent activities. An HO-4 policy will...