Unlocking the Power of Home Insurance Riders
Standard home insurance policies sometimes don’t cover all you need them to. But did you know that you can add enhancements to modify your policy? These enhancements are called insurance riders or endorsements.
What are Insurance Riders?
Riders (AKA endorsements) are optional enhancements that customize your insurance coverage to fill in the gaps that a basic policy doesn’t cover.
According to MetLife, the cost of an insurance rider depends on the type and amount of coverage you’d like to add. However, there’s typically less underwriting involved with riders, which helps keep the cost to a minimum.
Riders specific to your home coverage might include water and sewer backup and guaranteed replacement cost. We’ll talk more in-depth about your rider options below so you can explore what you may want to add your home’s policy.
Types of Home Insurance Riders
Wind & Hail Rider
Insurance companies have significantly scaled back their coverage on wind and hail coverage in the past year due to a substantial increase in storm damage claims. Because of this, you should ask your agent about a rider for wind and hail. This will help ensure you’re not paying tens of thousands to replace your roof or siding if a storm blows through and causes damage.
Water & Sewer Backup Rider
This type of rider will cover water damage caused by events that are not otherwise covered by your policy, including backups of pipes, sewer lines, drains, and sump pumps.
However, the insurance agents we spoke with say that, depending on the extent of the damage, you may not always want to file a claim for water and sewer backups. If damage is minor, you may be better off paying for the repairs out-of-pocket. Filing a claim for minor damage may not be worth the ding to your policy.
Flooding Rider
If your property is near a body of water and at-risk of flooding, this type of rider can help protect you from the expense of flood damage. Most policies don’t cover damage due to groundwater flooding. Keep in mind, a flooding rider is separate from a water and sewer backup rider.
Scheduled Items Rider
Scheduled items are your most valuable personal belongings. Examples include jewelry, watches, musical instruments, firearms, fine art, golf clubs, or medical devices.
Your home policy will cover most of your belongings, but there are limits on the more valuable items. Adding these scheduled items separately to your policy will give you better coverage on them. However, you will have to provide proof of each items’ value through a receipt or appraisal.
Underground Service Line Rider
This is coverage for the repair or replacement of pipes, cables, and lines that run underground from your home to the street. Repairs or replacements of these lines can cost you thousands or even tens of thousands. An rider will help protect you from these expenses.
Ordinance or Law Rider
This rider would cover the cost of updating elements of an older home to comply with new building codes and laws after a major loss.
Elements that are prone to code changes include electrical, plumbing, HVAC, staircases and banisters, building materials, and more.
Guaranteed Replacement Cost Rider
This guarantees to cover the cost rebuilding your house regardless of its market value or policy limit in the case of your home being a total loss after a disaster.
According to the Consumer Federation of America, 6.1 million homeowners in the U.S. are underinsured. Reasons for being underinsured include inflation and home improvements or additions that were not reported to your insurance company. Check out our blog post about being underinsured here to learn more.
When a guaranteed replacement cost rider is added, the insurance company agrees to rebuild your house no matter what its insured amount is. As long as your policy covers the cause of the damage, you don’t have to worry about your home’s insured value.
Contact Your Agent About Adding Insurance Riders
The last thing you want is to experience a household disaster and have to pay thousands upon thousands out-of-pocket to restore your home. So, now that you know some of your rider/endorsement options, give your insurance agent a call to see about adding to your home’s policy.
