State Farm Insurance License Practice Exam

An HO-4 policy is designed specifically for tenants who rent their living space. It provides coverage for personal property against a variety of named perils, which typically include risks such as fire, theft, vandalism, and certain types of water damage. This form of insurance is often referred to as a renters insurance policy and is crucial for individuals who do not own the physical structure but wish to safeguard their personal belongings.

In addition to protecting personal property, an HO-4 policy may offer liability coverage, protecting the tenant in the event they are held responsible for injury or damage to someone else's property. It does not cover the physical structure itself, as that would be the responsibility of the landlord's insurance. This type of coverage is important for renters as it ensures they can recover financially from losses due to unexpected events, providing peace of mind while living in a rented property.