Home insurance is a great way to protect your house. It’ll cover your personal belongings and your building’s structure. But it won’t replace everything. You might need extra protection for your house to avoid any needless disasters. For this reason, many insurers offer homeowners endorsements or riders.
Endorsements are optional protections that you can add to your homeowners policy. They can help cover perils that your home insurance policy won’t, such as sewer backup damage and identity theft. Riders can assist in replacing expensive items like jewelry and art. Adding one can help you take care of gaps in your coverage and go beyond your policy limits.
This article will teach you about home insurance riders and endorsements. We’ll tell you about how they work and who needs them added to their homeowners policy. We’ll also define all the specific types that most insurers offer. Finally, we’ll answer some frequently asked questions on the topic.
How Homeowners Endorsements Work
Endorsements are a way to add extra or optional coverage to your homeowners policy. You may also see insurers refer to these as “policy riders.” To add one, you’ll need to pay more for it. They help you protect your home from uncovered perils and damages that go over your insurance limits. Normally, damages that cost more than your limits would require you to pay for them.
There isn’t a one size fits all rider to add to your policy. Rather, there are many types you can pick and choose from. Each type of endorsement protects you in its own way. These are the most common types:
- Scheduled personal property coverage
- Water backup
- Business property
- Building code
- Identity theft
Note that these aren’t the only types of riders that companies offer. Also, keep in mind that not all insurers offer the same ones. Each insurance provider has its own set of endorsements that you can choose from. It’ll be up to you to find out which company has what you need.
Who Needs Endorsements
Endorsements are a great option for anybody who wants more protection. But some people could use them more. They’re a good option if you have any coverage gaps. For example, if you’re at risk for a certain peril, but your policy doesn’t cover it. Or if you run a business at home and need to protect its property. Endorsements can fill gaps such as these.
You may also want extra coverage if you own expensive items. Standard homeowners policies usually come with personal belongings protection. But there’s a limit to to what your provider will replace after a loss. Extremely valuable items like jewelry and art may cost too much for your insurer to replace. A scheduled property rider can help you in this case. It can extend your limits for any objects that you choose.
Types of Endorsements
Insurers offer several types of riders for you to take advantage of. Each one offers something different to your policy. Some will extend your coverage limits. And others will protect you from perils that your policy wouldn’t otherwise cover.
Below is a list of the most common types of riders and endorsements and a look at what they’ll cover:
Scheduled Personal Property
Normal home insurance policies will protect your personal belongings. But sometimes that isn’t enough to replace your most valuable and expensive items. Your policy only goes up to a certain limit. Anything that goes over would force you to pay for the rest of the damages.
A scheduled personal property policy rider would help you cover your expensive items. It’ll extend your coverage limit for certain objects that you choose. Usually, your insurer will raise your limits to your items’ appraised value. For example, jewelry is often very expensive to replace. An endorsement would help you with the replacement cost of a structure. The most common expensive items include:
- Jewelry
- Antiques or collector’s items
- Furs
- Art
Keep in mind that a homeowners policy won’t include your car. Your auto insurance would cover your car if a random disaster were to destroy it.
Water Backup Coverage
Standard homeowners insurance policies typically don’t extend to any sort of water backup or flood damage. If it were to happen, you’d have to pay for the damages out of pocket. A policy rider could help cover any water backups that damage your home.
In general, sewer and sump pump backups are the main culprits for this type of damage. Sump pumps work to remove any water that builds up around your house. These systems can randomly fail. An endorsement will help make sure you don’t have to worry if this happens.
Business Property Coverage
If you’re a small business owner, you’ll want to protect your property. Unfortunately, standard home insurance policies don’t normally include business property. But a business property endorsement can help cover any of your company’s property. This includes inventory that you decide to store in your house.
Home Business Coverage
A home business policy rider applies your homeowners insurance to your small business. For example, your liability protection and personal belongings coverage would apply to your business. This also includes any perils that your policy covers.
Building Code Coverage
A standard home insurance policy protects the physical structure of your house. This is what insurers call dwelling coverage. But things get a little complicated if the construction doesn’t match up to your city’s code.
If a disaster destroys your house, your homeowners insurance will normally pay to rebuild it. But any additional expenses to get your house up to proper code would fall on you. Luckily, some insurers, such as Allstate, offer a building code endorsement to cover this situation. You may want to ask your agent about this if the structure of your house doesn’t meet building standards.
Identity Theft Protection
In today’s world, identity theft is becoming all too common. Identity theft could cost you a great deal financially. Your credit and financial situation often take a major hit. You may also have legal fees to deal with. An identity theft protection endorsement will help take care of these expenses for you.
Other Types
The examples above represent a fraction of what you can protect with an endorsement. Homeowners insurance providers commonly allow riders for various items, such as:
- Sports equipment e.g., golf clubs, paddleboards, kayaks, skis, snowboards, etc.
- Digital items e.g., valuable computer files, images, etc.
- Landscaping equipment e.g., lawnmowers, yard tools, etc.
Each insurer has its own set of endorsements that they offer. Be sure to check with your agent about which ones may be useful to you. You might find that you have coverage gaps that you didn’t know about. A policy rider might be able to help you fix that.
How Much Do Endorsements Cost?
Endorsements are an add-on to your current policy. Adding one is going to cost you a bit extra. But it usually isn’t too much more. The price varies based on which one(s) you select. It might also depend on the items that you’re trying to insure. More expensive items will cost you more to protect. While extra coverage costs more, they’re still a very useful tool to help cover any gaps in your policy.
It might also be a good idea to work with the insurer that’ll give you the best deal on your home insurance rates. You can find the best deal by gathering quotes from various providers and comparing the rates you get from them. Doing this can help you pay less overall for your policy. As a result, you’ll have more money on hand to add extra coverage, such as with endorsements or umbrella policies.
Frequently Asked Questions
What is a rider on a home insurance policy?
An rider is an add-on to your homeowners insurance policy. They help cover things that your policy normally wouldn’t. This includes broad disaster protection including such as water backup and identity theft. Endorsements also helps replace expensive objects that might push your coverage limits. This is helpful if you have jewelry, electronic, art, or other items that would cost a lot of money to replace.
What’s a personal property floater?
A floater is similar to a homeowners endorsement with a notable exception. Policy riders cover broad categories of disasters and possession loss, but floaters offer coverage for valuable possessions and assets such as jewelry or art.
Some examples of personal property floaters include:
- Additional insured
- Additional interest
- Additional theft coverage
- Alarm or fire protection system
- Bacteria, fungi, or rot
- Ordinance or law
- Replacement cost loss settlement
- Personal property replacement cost loss settlement
- Sinkhole losses
- Water back-up and sump discharge or overflow
- Windstorm protection devices
What is a home business endorsement?
This rider applies the same amount of coverage that your normal policy provides to your business. This means that your homeowners insurance policy would extend to your small business. Note that this is different than the business property endorsement, where it protects any property of your company that’s in your house.
What’s the difference between a rider and an endorsement?
A rider and an endorsement are the same things. You’ll often see insurers use both terms interchangeably. They’re a way for you to add extra coverage to your policy.
How do I know how much my jewelry will cost to replace?
You’ll need to get your jewelry appraised for your insurer to know how much to give you. Usually, you do this when you add scheduled property coverage to your policy. Your insurer will raise your limits up to the appraised value of your jewelry or other items that you choose. This gives you exactly enough homeowners insurance protection to replace what you’ve lost.
