What is the primary function of an HO-4 policy?

The primary function of an HO-4 policy is to provide coverage for renters. This type of insurance is specifically designed for people who are renting their living space rather than owning it. An HO-4 policy typically offers personal property coverage, which protects the renter's personal belongings against risks such as theft, fire, and vandalism. It may also include liability protection, which covers legal costs and damages in case the renter is found liable for injuries or damages that occur to others on the rented property.

Understanding the nature of an HO-4 policy is crucial for individuals living in rental units, as it fills the gap left by the landlord's insurance, which usually covers the building but not the tenants’ personal belongings. This policy does not cover the physical structure of the building itself, which further distinguishes it from homeowners insurance policies, making it specifically tailored for renters' needs.

Other options relate to different types of insurance, such as homeowner’s policies, which cover dwellings owned by the policyholder, mobile home insurance, tailored for mobile homes, and other homeowners associations for condominiums. Each serves different insurance needs, highlighting the targeted nature of the HO-4 for those renting a space.