What are Insurance Endorsements?
Simply put, insurance endorsements, also known as insurance riders, refer to a change to your insurance policy to fill any coverage gaps or uncovered events in your policy. Endorsements help us to build you a customized policy that fits your unique needs.
When it comes to insurance protection, it’s important to understand what your policy actually covers. And with all the confusing insurance jargon out there, sometimes that can be difficult. Educating yourself is the first step to gaining confidence in your coverage, and we’re here to help. Let’s start by learning about endorsements — key pieces of your policy that help protect what matters most.
How Do Insurance Endorsements Work?
When you make changes to your existing policy — adding or removing, increasing or decreasing coverage limits, for example — you are doing so with an endorsement. Endorsements can be added at the time of purchase or at any point during your coverage, including renewal.
Endorsements are often added when base coverage is not enough, or circumstances have changed. A great example of that may be something like a jewelry purchase. You’ve increased the value of your personal property, perhaps exceeding the limits of your current policy coverage, so you would need to add an endorsement to cover that monetary difference.
Endorsements for valuables may come at an additional cost, but they can offer real benefits by enhancing your protection.
Why Do I Need Insurance Endorsements?
The purpose of an endorsement is to enhance your base policy — whether it’s your home, car or something else. You need endorsements so you’re protected the way you want to be.
Endorsements let you customize your coverage to fit your specific needs by either adding, eliminating or modifying the coverage on your policy. Maybe you’ll have higher limits of coverage or be protected for a broader range of losses — whatever the case, policy endorsements are meant to give you peace of mind that, in the event of the unexpected, you have proper protection in place.
The Benefits of Having Insurance Endorsements
Insurance endorsements apply to a variety of things — from additional protection on your personal items, to a simple address change. While the option to customize your policy at any time is certainly a benefit in itself, we think there are a couple of pretty common situations where an endorsement would enhance your policy.
Enhanced coverage for what matters most
When your personal belongings are valued beyond the sublimits of your policy — sublimit being the maximum coverage on your policy for a specific type of loss, like jewelry — your insurance may not cover their total value without a rider. Let’s take a look.
Suppose you have $5,000 in jewelry and the sublimit for personal property coverage on your homeowners insurance is $3,500, there would be a $1,500 gap that insurance wouldn’t pay.
By adding a rider to your policy — paying for additional coverage on personal property, such as jewelry — you would spend a little extra per year for extra protection and greater peace of mind.
Affordable deductibles for valuable items
Another great benefit of having insurance endorsements is that you won’t have to worry about some of the traditionally higher deductibles associated with personal property coverage.
For example, if you had jewelry valued at $5,000 stolen, and your property deductible is $2,000, you would only receive $3,000 on your claim. If you had a rider for the jewelry, however, and the deductible were 2% of the value of the items, you would pay $100 and your claim would reimburse you $4900 for the jewelry.
Examples of Common Insurance Endorsements
An American Family homeowners policy gives you a specific amount of personal property and liability protection, but what if you need coverage beyond that limit? What if you run a business from your home, have a finished basement or own valuable jewelry? You’ll want to make sure you have the proper protection — and that’s where insurance riders come in.
Home business coverage
You may think that your small home business is covered by your standard homeowners insurance policy, but that’s not the case. Actually, if you’re planning on conducting any business from your home and want coverage for events such as a customer slipping and falling on your front steps or coverage for damage to your business property, such as a fire ruining your equipment, you’ll need to add limited home business coverage and/or business property coverage.
Itemized personal property coverage
Most homeowners policies cover jewelry, but the coverage has a set limit. So, if the total value of your jewelry is more than the jewelry limit in your policy, you’ll want to consider adding coverage. You can do this by increasing your total coverage limit for jewelry, or by itemizing specific jewelry items, which, in addition to providing higher dollar amounts of coverage, also provides coverage for a broader range of losses.
Sump pump failure coverage
Our water damage and sump pump failure coverage is designed to mitigate the cost of repairs caused by water leaking into a home due to a backed-up drain, malfunctioning sump pump or other pipe and drain faults. While it’s not automatically included in a homeowners policy, it can easily be added on for a fraction of what it would cost to repair and replace water-damaged items in your home. Find out more about water backup coverage.
And they’re not just available for your home policy — you may add endorsements to your renters policy, condo, auto and watercraft. No matter what you’re looking to protect, we can customize your coverage to make sure you’ve got the policy that’s right for you.
How Long Does an Endorsement Stay on My Policy?
An endorsement will stay in force until your policy expires. It can be renewed under the same terms and conditions as your basic policy. Though, if your endorsement specifies a term limit, it’ll be valid up to that point only.
How to Get Insurance Endorsements
Educate yourself on your options for endorsements by setting up a personal insurance review with your American Family agent. They’re your go-to for expert advice on all things insurance and they’ll guide you through your policy to help you determine if there are endorsements you should to consider. Connect with yours today.