What Is a Homeowners Insurance Rider and Why Do You Need It?

Homeowners Insurance Riders

Generally, an insurance rider is an optional add-on to an insurance policy. It is also called a floater or an endorsement. A homeowners insurance rider amends a basic policy, allows you to increase your coverage limits, expand coverage for certain property, or extends protection to help cover additional risks. A rider serves an expanded purpose to secure your home based on your identified circumstance.

Why the Need for a Homeowners Insurance Rider?

A typical homeowners insurance policy comes with a set of standard protections like dwelling coverage, other structures coverage, personal property coverage, and personal liability coverage. Each standard protection covers specific risks or perils, which are listed in your policy and subject to coverage limits with probable restrictions, exclusions, or sub-limits. With a rider, you can pay extra to expand the scope of your standard coverage.

For instance, your personal property coverage has a limit coverage for certain valuables, like an expensive oil painting. It has a coverage limit of $50,000 for personal property coverage and a sub-limit of $1,500 for the expensive oil painting. If your expensive oil painting is stolen or burned in a fire, you will only be reimbursed up to $1,500 for its replacement. However, a rider will help provide more coverage if you need additional coverage for that oil painting.

Common Homeowners Insurance Riders

You may wish to add some of these homeowners insurance riders to your policy:

  • Scheduled personal property coverage – A scheduled personal property rider increases coverage for certain valuables like jewelry, furs, or antiques. It expands the coverage limits for your scheduled items up to each item’s appraised value. It protects against additional risks such as loss or misplacement not covered in a standard homeowners policy.
  • Water backup coverage – This endorsement covers water damage from a backed-up drain or sump pump. It helps pay for the repair of certain types of water damage, such as the cost of replacing furniture or removing water after unexpected backup damage to your home.
  • Building code coverage – If your home is not up to current building codes when it is damaged, standard dwelling coverage in your policy will not cover it, and you might have to pay the difference out of pocket to bring it up to code. A building code floater helps pay the additional cost to comply with local building codes required to repair your home after a covered claim.
  • Business property coverage – This rider helps provide additional protection to your home-based business property. It also helps protect business-related items stored in your home, including products you are planning to sell.
  • Identity theft restoration coverage – This floater helps reimburse you for costs incurred after identity theft, such as legal fees, lost wages, or costs to mail documents.

Consult with your agent to understand additional home insurance riders, like landscaping or renovation projects that may be available to add to your policy.

When Do I Need an Insurance Rider?

When you identify a coverage gap, it is wise to add a rider to cover the difference. Your insurer may offer many types of home insurance riders, so it is good to talk with your agent about your particular situation. An annual review of your policy could help identify where gaps lie.

The experts here at Udell Family Insurance are here to make sure that you have the right insurance in place. We are ready to assist you with all your coverage needs today.

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