Hawaii Insurance License Practice Exam

Which of the following individuals would need HO4 insurance coverage?

1. A homeowner

2. A condo owner

3. A renter

4. A business owner

The correct answer is: A renter

HO4 insurance, also known as renters insurance, is specifically designed for individuals who are leasing or renting a home or apartment. This type of policy provides coverage for personal property and liability, which is essential for tenants who do not own the dwelling they're living in. Renters typically do not need homeowners insurance because they do not have ownership of the building and therefore are not responsible for the physical structure itself. Instead, their insurance needs focus on protecting their personal belongings—such as furniture, electronics, and clothing—against risks like theft, fire, or damage, which is the core function of HO4 coverage. Additionally, it often includes liability protection in case someone is injured while on the renter's property. In contrast, homeowners and condo owners need different types of insurance, typically HO3 or HO6, which cover the dwelling itself in addition to personal property. Business owners would also require a distinct type of insurance tailored for their operations, rather than the personal coverage afforded by HO4. Thus, renters are naturally the individuals who require HO4 insurance to safeguard their personal assets within a rented space.