What are insurance riders?

17 Jan

An insurance rider is also known as an endorsement on your insurance policy. It is basically an optional provision attached to the policy that alters the coverage of your standard insurance policy. Riders are usually used to add additional coverage to the policy but can also be used to amend the terms of the policy or even exclude certain losses from the policy. A rider allows a policy to be customized without having to cancel and rewrite a new one. 

Riders are available for most types of policies but today we will look at riders that impact homeowners and auto insurance.

A Few Facts About Riders

  • Riders are not standalone policies, they are attached to an existing policy
  • Riders help policyholders customize their insurance policy to meet their specific needs by addressing coverage issues in the original policy
  • Insurance riders vary by insurer and the state that you live in
  • Riders are usually not free, they require an additional premium

Common Riders for Home and Auto Insurance

Here is a quick overview of some common riders related to home and auto insurance. This list is not comprehensive and can vary by insurer. If you feel that you have a hole in your insurance coverage, call your agent to see if there is a rider that can help you fill in the gap. 

Homeowners Insurance

When it comes to homeowners insurance, riders are typically used to extend coverage to perils not covered in the original policy or expand coverage limits in general and increase your limits on high value items which come with a coverage cap in most standard policies. 

Here are some of the most common homeowner insurance riders:

Scheduled Personal Property Coverage: Standard homeowner policies come with a coverage cap on luxury items such as furs, art collections, jewelry and even cigar collections. While it varies by insurers, most polices cap coverage for these items at around $1,500. This rider allows you to increase coverage for these types of items up to the items appraised value. The increase in your premium will depend on how many items you need to cover and their value.

Water Backup Coverage: The majority of standard homeowners policies do not cover water damage caused by a drain backup or sump pump. This rider will cover this type of damage. It should be noted that this rider does not cover flood water damage. 

Building Code Rider: If you live in an older home that is not up to date with current building codes, you may want to consider this rider. It covers any additional costs that pop up related to bringing your home up to current code while rebuilding or repairing after a claim for damage.

As an example, if your older home is severely damaged during a tornado, you may need to bring it up to current code when repairing the damage, this rider will cover the costs related to code issues. 

Business Property Coverage: Standard homeowner policies exclude business related equipment in your home if you are running a home business or even if you are working from home on a regular basis. This rider will extend coverage to your business equipment in the event it is damaged by a covered peril. 

Identity Theft: This rider will help cover costs related to repairing your credit and identity if you are a victim of identity theft.

Auto Insurance

Riders don’t really exist in the world of auto insurance, but you can choose to add optional coverages which are similar to riders. These optional coverages provide additional benefits not in your policy for an additional premium. 

Here are a few common additional coverages:

  • Rental Car Reimbursement: This will cover the cost of a rental car if your vehicle is being repaired due to a covered claim. This coverage is usually limited to 30 days. 
  • Roadside Assistance: Many insurers offer roadside assistance to their policyholders for an additional fee. Like AAA, this additional coverage will help with flat tires, lost keys, jump starts and towing. 

Add Riders To A Policy Is Easy

You can add a rider to your policy at any time during the policy term, it does not have to be done when you purchase the policy. Adding a rider is simple, call your agent and request that they add whatever rider you are interested in putting on your policy. After you approve the additional premium and sign a bit of paperwork, you should be covered. 

Please click here for new homeowners and auto insurance quotes, we can also help you add additional coverage policies. We look forward to helping you!

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