An endorsement is an addition to an insurance policy that adds extra protection, covers property types that were excluded by the main policy, or adds coverage for a peril that is especially common in the area
Endorsements are available as a separate purchase to increase the overall coverage level of a homeowner’s insurance portfolio, but are also available as an option during the initial policy purchase.
What are the most popular home insurance endorsements?
The most commonly purchased types of home insurance endorsements include the list below.
- Replacement cost coverage - Additional coverage to provide a payout sufficient to cover the rebuild of the home at today’s prices, not at a lower, depreciated level.
- Flood insurance - Protection against flood water damage is frequently excluded from homeowners insurance. Flood endorsements are often a necessity in flood-prone areas.
- Water backup and overflow - Different from flood insurance, these riders provide coverage for damage from in-house water and sewage-backup damage.
- Scheduled personal property - These riders, often priced as a flat fee, offer additional coverage for specific categories of valuable items including jewelry, art, antiques, or guns.
- Ordinance or law coverage - This covers the costs that may be needed to bring a home up to code after repair from a covered incident in a case where local building codes have changed since the original construction.
- Service line coverage - Adds a provision for repairing a damaged utility line under your property that may have caused damage as a result of its rupture.
- Equipment breakdown - This endorsement provides a payout to replace broken appliances that were not damaged by a covered peril like fire, but that are no longer working.
- Inflation guard coverage - An inflation guard rider can adjust your home’s coverage limit to match changes in construction and repair costs that are a result of inflation.
Does an insurance endorsement have a deductible?
Yes, an endorsement on a homeowners insurance policy will typically have a separate deductible assigned to that piece of additional coverage. These secondary deductibles can be priced as a flat fee, which could be anywhere from $500 to $2000, or more. Other endorsement deductibles are often calculated as a percentage of the insured value of the property. These ‘percentage deductibles’ are most commonly equal to 1% or 2% of the property value, but prices based on 5% of the home value are not uncommon in certain higher-risk areas.
What’s the difference between an insurance endorsement and a rider?
An insurance rider and an endorsement are the same thing. Endorsement, rider, and floater are all different names for a piece of add-on coverage.
What is the premium for a home insurance endorsement?
Home insurance endorsements do carry an additional monthly or annual cost, the premium. This can be billed in different ways. If the rider is purchased alongside the primary policy, the extra cost of the endorsement can simply be added to the monthly (or yearly) billed total.
Endorsements to a policy can only be purchased from the carrier that wrote and sold the primary policy to the customer. If additional coverage is needed that is not offered as a rider from the primary provider, a standalone policy may be needed. A standalone flood insurance or wind and hail insurance policy could be necessary depending on location, for example.
Gray is the Senior Content Specialist at Sola Insurance, working with the Sales and Marketing teams to provide helpful, valuable content for homeowners and agents. Gray has worked previously in finance, logistics, and advertising.
