Renters insurance (HO-4) is an insurance policy that protects tenants for their personal property. Renters insurance does not cover damage to the apartment or housing complex the renter resides in because this is on the landlord. It is exclusively designed to secure a renter’s personal property such as their clothes, electronics, jewelry, or any other personal possessions.
In the event of floods, house fires, or electric power outages, any damages to personal property have to be compensated by the insurance company. Theft is also included and this is one of the main reasons to get coverage if you live in a high-crime area. This guide will look into HO-4 renters insurance and how it protects you from personal property theft in the event of a burglary.
So, does renters insurance cover burglary? Yes, renters insurance policies cover burglary and stolen property. You will be compensated for every stolen item in the condo/housing you rent. This includes your clothes, electronics, or high-value items that you have in possession. Burglary is the main covered peril for renters insurance policies and is the main reason to purchase this insurance policy as a tenant. Whether you’re held at gunpoint and robbed while you’re at home or your home is broken into and personal items were stolen, the insurance company has to compensate you for the value of your items.
Renters Insurance (HO-4) and Burglaries
Burglaries, like robberies, are insured under renters’ insurance policies. Every single item that was stolen will be replaced by the insurance company once you file a copy of the police report and make a claim. To gain approval for renters insurance, the insurance company will ask you to submit a list of all personal items in the rental unit that you want to be insured.
Write down every single item you want insurance on, whether it’s big or small. For instance, you can insure your $1000 laptop or your $100 Nike shoes. You can also insure a $10,000 gold Rolex, although high-value items have to be reported separately and they may slightly increase your premium. If the home is burglarized, getting the item replaced is as easy as filing a claim.
The HO-4 insurance policy can also include unusual things such as intellectual property. For instance, if you have unique design ideas or music records that belong to you, you can get insured for that as well. Personal items ranging from small comic collections to music instruments can be covered under renters insurance. Certain insurance companies also permit you to insure trees and plants.
Will I Always Get Paid Out?
Yes – every time your personal items are stolen in a burglary, the insurance company will pay out the full value for each item. You’ll have a total coverage limit and a limit per item you can claim. If the entire condo is swept up, you can claim insurance on multiple items at once. There are only rare instances where you won’t get paid out.
These include high-value items such as artwork, cash, firearms, watches, vintage collectibles/antiques, designed clothes, and other valuables. You have to report these items individually. This is why it’s crucial to be transparent with the insurance company when you’re taking out an HO-4 policy. If they don’t report the true value of your belongings, you won’t get fully compensated when your home is burglarized.
Deductibles for Filing Claims on Theft
All insurance claims require you to pay a deductible. The deductible is the money you have to pay out of pocket to get your check from the insurance company. The deductible varies and it’s going to be proportional to the claim you’re making. The higher the claim, the more you’ll have to pay out of pocket towards the replacement. For personal items, the most common deductible amount is between $500-1000 and you only have to pay this once. For instance, if the burglar steals your $1000 laptop, $1500 TV, and $500 worth of clothes, the insurance company will pay $3000 while you’ll only have to pay $500.
Considering the average renters’ insurance policy costs around $15-20/month, and this is a great deal to insure thousands of dollars worth of personal items. HO-4 insurance has an average coverage limit of $20,000. If you have valuables in the home, you can optionally increase the maximum coverage to be reimbursed for all property in the household. If you don’t take out adequate coverage, you can be underinsured. Example: You have a $25,000 limit and the burglar steals $50,000 worth of personal items. You’ll have to pay the other $25,000 out of pocket.
Other Protections of HO-4 Insurance
HO-4 insurance policies can come with other protections aside from personal property protection. For instance, you might get basic liability insurance and medical payments. This means that if someone is injured in the property you’re renting and they press charges, you’ll have liability insurance to cover you for the legal costs. You may be entitled to medical payments in the event they’re injured in the property.
HO-4 insurance also provides protection from other damages to personal property. If a burglar breaks in through the window of your apartment and the window is damaged, you can have rain or snow penetrate through the window and fall on your items. Let’s say you’re away from your home for a few days and this causes damage to your personal items. You would still be entitled to damages even though those items weren’t stolen. You will be reimbursed for all damage to your personal belongings in the rental unit. The broken window would fall on the landlord’s insurance to cover.
Some HO-4 policies include features like credit card protection. This is essential protection against credit card fraud in the event your credit card is stolen during a burglary. If the burglar uses your credit card to make purchases, the insurance company will compensate you for the money defrauded. The standard coverage for credit card fraud is around $500, but you can increase this limit at a small premium increase. If you hold valuables in the rental property, consider purchasing an endorsement (also called a rider) that will enhance your total coverage and the individual limits on the most valuable items that are not covered under the base HO-4 policy.