1. Forms
2. HO
3. HO-00-04

HO 00 04 - Homeowners 4 - Contents Broad Form (Renters Insurance)

1. What the form is

The HO 00 04, commonly known as the Contents Broad Form or Renters Insurance, is designed for tenants who are renting a home, apartment, or condominium. Its primary purpose is to provide coverage for the tenant's personal property (Coverage C) on a named perils basis. This means the policy specifically lists the causes of loss that are covered, such as fire, theft, vandalism, and windstorm. In addition to protecting personal belongings, the HO 00 04 also includes crucial Personal Liability coverage (Coverage E) and Medical Payments to Others (Coverage F). This liability protection applies if someone is injured in the rented premises and the tenant is found legally responsible, or if the tenant causes damage to someone else's property. The form also typically includes coverage for Additional Living Expenses (Coverage D), which helps with costs if the rented dwelling becomes uninhabitable due to a covered loss. Importantly, the HO 00 04 does not cover the physical building or structure itself, as that is the landlord's responsibility.

2. Classes of business it applies to

The HO 00 04 is specifically tailored for individuals or families who are tenants. This includes a wide range of rental scenarios:

• Apartment Renters: The most common use, for individuals living in apartment buildings.
• House Renters: Tenants renting single-family homes or multi-family dwellings (e.g., a duplex where they don't own the structure).
• Condominium Renters: Individuals renting a condominium unit from its owner. (Note: Condominium owners would typically use an HO 00 06).
• College Students: Students living in off-campus housing or, in some cases, dormitories where the university doesn't provide adequate personal property coverage. An HO 00 04 can provide them with their own dedicated property and liability protection.
• Co-habitating Non-owners: In situations where individuals live in a dwelling they don't own, such as residing with a homeowner but not being an "insured" under the homeowner's policy, an HO 00 04 can cover their distinct personal property and liability exposures.
• Tenants in various dwelling types: This form is versatile enough to be used whether the insured rents a room, an apartment, or an entire house.

3. Special considerations

• Named Perils Coverage: Personal property is covered only for losses caused by perils specifically listed in the policy (typically 16 perils). For broader "open perils" coverage on personal property, an endorsement like HO 05 24 (Special Personal Property Coverage) would be needed, or the insured might consider the newer HO 00 14 (Contents Comprehensive Form).
• Actual Cash Value (ACV) vs. Replacement Cost Value (RCV): Unless endorsed, personal property losses are typically settled on an ACV basis, which accounts for depreciation. The HO 04 90 endorsement can be added to provide RCV, which pays for the cost of new items without deducting for depreciation.
• Landlord Requirements: Many landlords require tenants to carry renters insurance and may specify a minimum limit for liability coverage. Agents should advise clients to check their lease agreements.
• Building Additions and Alterations: The HO 00 04 provides a limited amount of coverage (often 10% of Coverage C) for improvements, alterations, or additions made by the tenant to the rented premises. The HO 04 51 endorsement can increase this limit if needed.
• Special Limits of Liability: The policy contains specific, lower limits for certain categories of personal property, such as money, securities, jewelry, firearms, and business property. These limits can often be increased by adding endorsements like HO 04 65 (Coverage C Increased Special Limits of Liability).
• Business Property: Coverage for business property is very limited, especially for property used away from the "residence premises." Tenants operating a home-based business should be evaluated for additional coverage needs, potentially through endorsements like HO 04 42 (Permitted Incidental Occupancies - Residence Premises).
• Excluded Perils: Common exclusions include flood, earthquake, and damage from an excluded peril (e.g., wear and tear). Coverage for some excluded perils, like earthquake, may be available via endorsement.
• Related Declarations Form: The HO DS 04 is the declarations page that personalizes the HO 00 04 policy with specific insured information, coverage limits, and premiums.

4. Key information for agents and underwriters

• Pricing Considerations:
  • Key rating factors include the amount of Coverage C (Personal Property) and Coverage E (Personal Liability) selected, the deductible amount, the geographic location of the rental (premiums can vary significantly by state and territory), and any optional endorsements added.
  • Minimum premiums often apply to HO 00 04 policies.
• Risk Assessment & Underwriting:
  • Property Valuation: Encourage applicants to create a home inventory to accurately determine the amount of Coverage C needed. Underwriters may look for unusually high Coverage C limits relative to the type of rental or insured's profile.
  • Liability Exposures: Inquire about pets (especially certain breeds), swimming pools (if the rental includes exclusive access to one, though less common for typical HO-4 risks), trampolines, or other liability hazards that might increase risk. Some insurers have specific guidelines or exclusions for certain animal breeds or liability exposures.
  • Loss History: An applicant's prior claims history is a significant underwriting consideration.
  • Occupancy: While designed for tenants, extended unoccupancy of the rented premises could be a concern and might affect eligibility or require specific underwriting.
  • Business Activities: Thoroughly investigate any business conducted from the rented premises to ensure proper coverage and address potential exclusions.
  • Fair Access to Insurance Requirements (FAIR Plans) may offer HO 00 04 coverage for risks unable to obtain it in the voluntary market, often with specific underwriting criteria.
• Potential Coverage Gaps to Address:
  • Open Perils for Contents: Discuss the option of HO 05 24 or the HO 00 14 form if the client desires broader "open perils" coverage.
  • Replacement Cost: Always offer the HO 04 90 endorsement for RCV on personal property.
  • Water Backup and Sump Overflow: This is often excluded; offer endorsements like HO 04 95 (Limited Water Back Up and Sump Discharge or Overflow Coverage) or HO 06 95 (Broadened Water Back-Up And Sump Discharge or Overflow Coverage).
  • Ordinance or Law: While the HO 00 04 provides a base level of coverage for increased costs due to enforcement of ordinances or laws related to tenant improvements, this is often 10% of the Building Additions and Alterations limit. If significant tenant improvements are made, consider the HO 04 77 (Ordinance or Law Increased Amount of Coverage) endorsement.
  • High-Value Items: Review special limits for jewelry, firearms, etc., and recommend scheduling items or increasing limits via HO 04 65 if values exceed the base limits.
  • Identity Theft: Consider offering an identity theft protection endorsement if available.