What type of insurance should a tenant typically hold in a residential lease?

Tenants in a residential lease are typically advised to hold HO-4 insurance, commonly referred to as renters insurance. This type of policy provides coverage for personal belongings within the rented apartment or house, protecting against risks such as theft, fire, and certain types of water damage. Additionally, HO-4 insurance usually includes liability protection, which can be beneficial if a tenant accidentally causes damage to the rental property or if someone is injured while on the premises.

HO-3 insurance, on the other hand, is designed for homeowners, providing broader coverage for the structure itself and personal property owned by the policyholder. Since tenants do not own the physical structure they live in, this insurance is not appropriate for them.

HO-1 is a more limited form of homeowners insurance that provides very basic coverage and is less commonly used today, especially for renters.

HO-5 is a more comprehensive homeowners policy that offers broader coverage than HO-3 but is still not applicable for renters. Therefore, renters should focus on acquiring HO-4 insurance to adequately cover their unique needs within a leased residence.