To understand the basic idea of insurance riders, let’s turn to a common scenario. Let’s say your great-grandmother gave you a necklace and a couple of rings that are now worth about $5,000. You’d like your home insurance policy to repair or replace these items if they’re damaged by, say, a fire or another loss type. However, your policy might only pay out a maximum of $1,500 for jewelry — a common limit.
That’s where an insurance rider comes in handy! Simply put, an insurance rider is an optional add-on to your policy that gives you additional coverage for a small fee. (In this case, you would add a jewelry rider — more commonly known as jewelry insurance — to your policy.) Let’s explore the different types of home insurance riders, as well as the benefits and costs.
(FYI: You might also hear insurance riders referred to as endorsements, floaters or amendments.)
An insurance rider is an optional add-on to your insurance policy that gives you additional coverage for a small fee. It’s also commonly called an endorsement.
Insurance riders broaden the protections you already have in your home insurance policy. That might mean more coverage for your valuable items. Or, it might mean adding coverage for events that are not included in your current policy. Let’s take a look at some common home insurance riders:
Many homeowners add riders to their policies to cover jewelry, electronics, bikes, outdoor equipment, musical instruments and special collections. Other common riders include water backup, extended replacement cost and building codes coverage.
Home insurance riders can help you relax a bit knowing that your home and special belongings are covered in times of emergency. There are also a couple of other benefits:
Home insurance riders are fairly inexpensive, but the cost depends on the type of rider. For example, riders for jewelry and collectible items might cost $1–2 per $100 of value. In other words, a rider for a $7,000 watch might cost between $70 and $140.
Other riders like extended replacement cost coverage and building codes coverage might cost somewhere in the $25–$75 range.
Home insurance riders are relatively cheap and offer low deductibles and accidental loss coverage.
Technically, you don’t need an insurance rider since it’s an optional add-on to your standard policy. However, riders make sense in certain circumstances, like if you have a lot of valuables that your standard personal property coverage won’t fully cover or if you’d like protection against water backups and other events not covered in your policy.
When you purchase home insurance, you should also consider your rider options. Then, you can crack open the champagne and hold your house-warming festivities! Aside from that, you should also consider insurance riders every time you purchase a new valuable like a TV or an engagement ring. We recommend taking inventory of your belongings every year to see if you have enough coverage.
Luckily, our experts can help you pick out all of the common riders that are right for you — and a lot of the ones you never knew existed! Ask us a question about keeping your stamp collection or new mountain bike safe, or just say hello.
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