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The Role of Insurance Riders in a Homeowners Policy

Endorsements or floaters are insurance terms used to describe an insurance rider, which is an option that adds to an existing policy. Buying homeowners insurance riders can be an effective strategy for increasing coverage limits. Here are key focal points to understand about insurance riders in a homeowners policy.

Reasons for Home Insurance Riders

The standard home insurance policy focuses on four main areas: dwelling, other structures, personal property, and personal liability. A rider increases coverage limits for items not covered in the standard plan, like antique jewelry, which is often difficult to appraise and has a value that is always changing due to numerous factors. However, adding coverage clarifies that the item is meaningful, and you can expect to be reimbursed if it’s ever lost, stolen, or damaged.

Most people don’t like imagining what would happen if they were robbed. However, suppose for a moment you choose not to insure a special item even though it has deep sentimental value to you regardless of what anyone else would pay for it. One day it disappears, and you have to explain to the insurance company how the loss was devastating. Inevitably, the insurer will ask why you didn’t make sure it was insured if it was that valuable to you. To ensure all your most prized possessions are completely covered, submit a list of your inventory to your insurer for items to be appraised. Never assume that a homeowners standard insurance policy covers everything if your home is destroyed by a storm. Adding a rider to your standard homeowners plan can ensure that all your important and valuable items in your personal inventory are properly covered.

This is just one example of when a homeowners insurance rider would be useful, but many different types can be added to home insurance policies.

Types of Home Insurance Riders

  • Scheduled Personal Property Rider – This type of home insurance policy extension covers jewelry, furs, and antiques. It allows you higher coverage limits.
  • Water Backup Rider – Since standard homeowners insurance policies don’t include water damage, this add-on is useful for filling the gap. This rider can cover water damage caused by a backed-up drain.
  • Building Code Rider – This addition is useful if the property you plan to sell is old and doesn’t meet local building requirements. When your home doesn’t meet local codes, it means you’ll need to pay to bring it up to code.
  • Business Property Rider – If you run a home-based business, you may want to consider business property coverage for items such as your computer, printer, and other business equipment.
  • Identity Theft Restoration Rider – If your identity is ever stolen, this coverage is useful to rebuild your assets and pay for legal fees. It also helps repair any damage that may have been caused by the criminal.

Reducing Risks

Risk is the core fundamental that influences insurance rates. When you study the risks of homeownership losses, you can find ways to avoid spending more than you can afford. Find out from your insurance agent what type of home insurance endorsements they offer based on your specific location.

Adding riders to your standard plan is an effective and efficient way to limit your financial risk. Reducing risk is one of the most basic ways to maximize value. Purchasing extensions to policies show your insurer you are reducing financial risks of theft, loss, or damage.

Owning a home requires careful consideration of homeowners insurance riders. When you’re ready to secure a quality homeowners insurance coverage, talk to the friendly experts at Jack Stone Insurance Agency. We serve Antioch, Brentwood, and surrounding cities in California. Contact us today to get started!

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