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If you have a home insurance policy, you may have concerns about your coverage limits. That’s where an insurance rider comes in. Also known as a floater or an endorsement, an insurance rider is an optional add-on to an insurance policy that can boost your home’s protection. Here’s what you need to know about home insurance riders.[1]

What is an insurance rider?

An insurance rider is an optional add-on that can change the coverage of a standard insurance policy. You may use a rider to add benefits or modify the terms of your home insurance. It can allow you to address any issues you might have or customize your coverage for an additional cost.[2] An insurance rider can apply to a variety of insurance products in addition to home insurance, such as renters insurance, car insurance, and life insurance.

How do insurance policy riders work?

An insurance policy rider amends an existing insurance contract and changes its original terms. Depending on the insurance company and policy, you can purchase one before coverage begins, mid-term, or at policy renewal. Once you do, you can expect your premiums to increase as a result of the additional coverage.[2]

If you invest in a rider on top of your standard home insurance coverage, you can increase your homeowners coverage limits, expand coverage for your property, or extend protection to cover extra perils that your original policy excludes. You may benefit from a home insurance rider if you have many high-value items or would simply like some additional peace of mind.[2]

See Also: 10 Best Home Insurance Companies

Types of home insurance policy riders

Some of the most common home insurance riders you might be able to add to your policy include:

  • Scheduled personal property coverage: With a scheduled personal property rider, you can increase coverage for valuable items, up to their appraised value. These items can be jewelry, musical instruments, or antiques. This type of rider can also protect your valuables against risks that a standard home insurance policy doesn’t cover, such as loss or misplacement.

  • Water backup coverage: In most cases, a standard home insurance policy doesn’t protect against water damage from a sump pump or backed-up drain. In the event your sump pump or drain backs up, this rider will kick in and help you out. However, it won’t cover damage from the water that floods your home due to heavy rain or an overflowed river.

  • Flooding coverage: This rider can protect your home in the case of flooding. While many insurers may offer this type of coverage, you can also purchase it through federal or state government programs.[3]

  • Building code coverage: A standard home insurance policy will pay to repair your home to its original condition after a covered claim. But if it doesn’t meet current building codes, you may be on the hook for the cost to make it compliant. Building code coverage can pay for this additional expense. If you have an older home, it’s certainly worth exploring.

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What are the benefits of adding an insurance rider?

Investing in a home insurance rider offers a number of advantages, such as:

  • Improved coverage: A standard home insurance policy might not provide enough coverage for your unique needs. This is particularly true if you live in an expensive home or a home with many valuables. With a rider, you can choose the ideal coverage limit for your situation.

  • Chance to save money: It’s typically less expensive to purchase a rider than a separate policy for your high-value items. Before you commit to a rider, do some research to make sure this is the case for you.

  • No to low deductibles: Some riders don’t have deductibles. Others have deductibles that are much lower than the ones on a standard home insurance policy. This can reduce your out-of-pocket claim costs.

  • Greater peace of mind: If the provisions on a standard home insurance policy make you feel uneasy, a rider can be a good investment. It may give you the peace of mind you want.

Read More: Selecting a Home Insurance Deductible

Drawbacks to adding a home insurance rider

The most noteworthy disadvantages of a home insurance rider include:

  • Increased premiums: If you add coverage to your home insurance policy, your premiums will go up. It’s a good idea to shop around and compare options from different insurance companies.

  • Might purchase too much coverage: Depending on your situation, the limits on your current policy may be enough. You may end up with a rider that you never actually use.

  • Must meet eligibility requirements: Before you opt for a rider, make sure you’ve met all its eligibility requirements. Some companies may require you to add a rider when you first purchase a policy, rather than after coverage begins.

What items are commonly scheduled on a rider?

Riders are designed to cover items that a policy excludes or insufficiently covers. These items are typically valuable belongings, such as jewelry, furs, art, antiques, stamps, coin collections, musical instruments, and electronics. If you’re unsure whether a certain item qualifies for rider coverage, don’t hesitate to reach out to your insurance company.

How much does it cost to add a policy rider?

The price of an insurance rider depends on a number of factors, such as the insurance company, items, and appraised value. In general, however, riders are relatively low-cost. For example, Progressive states you can generally schedule an item for a small percentage of its appraised value.

Collectible items are even less expensive to insure. For instance, you might be able to schedule a stamp collection for $0.80 for every $100 in value. Compared to an entire insurance policy, riders are usually pennies on the dollar, making them very cost-effective. To land the best deal on a rider, don’t hesitate to take advantage of insurance comparison sites.

Check Out: Homeowners Insurance Companies with the Cheapest Rates

How to add an insurance rider

Fortunately, it’s fairly easy to add an insurance rider. Most insurance companies allow you to supplement your insurance plan with a rider at any time. This means you can purchase one when you first enroll in your policy, halfway through its term, or as your policy renewal is approaching. Here’s generally how to add an insurance rider to your policy:

  1. Provide your personal and home details to the insurance company to see how much coverage a standard home insurance policy provides.

  2. If you’re adding a rider to your insurance policy when purchasing coverage, simply opt in to any additional riders that the company offers. If you’re not sure whether the insurance company offers the riders you want, call and ask a representative.

  3. Review your selected riders and ensure that the coverage limits and additional monthly costs meet your needs and budget.

  4. Complete the purchasing process by reviewing the coverage, limits, premiums, and declaration page details and then signing the appropriate forms.

Insurance rider FAQs

Here are answers to some commonly asked questions about home insurance riders.

  • What does insurance rider mean?

    An insurance rider is optional coverage or a feature you can add on to an existing insurance policy, such as home insurance or life insurance. While a rider is typically affordable, you’ll have to pay extra for it and commit to higher premiums.

  • Do you need a home insurance rider?

    A home insurance rider isn’t mandatory. But if you’d like to expand your coverage or protect your home against risks that a standard home insurance policy excludes, it may be a worthwhile investment. Check the terms of your current policy carefully to determine whether a rider makes sense.

  • What are the benefits of a rider?

    A rider can help cover items or perils that your standard insurance policy doesn’t. It’s more affordable than an entirely new policy, as there are usually no or low deductibles, and it can provide you with some additional peace of mind.

  • Are any riders included in an insurance policy?

    Since a rider is an optional add-on to a standard insurance policy, it’s typically not included. If you’d like a rider, you’ll need to pay an additional cost. Fortunately, most riders are very reasonable in price.[1]

  • How can you drop an insurance rider?

    Most insurance companies make it easy to drop a rider. All you have to do is fill out a special form to authorize its removal.

  • How can adding a rider affect your insurance policy?

    A rider may help customize your insurance policy to better meet your needs. If you’re unsatisfied with your current coverage, a rider can be worthwhile. Just keep in mind that it’ll slightly increase your premiums.

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Sources

  1. Louisiana Department of Insurance. "Insurance 101: What is an Insurance Endorsement or Rider?." Accessed February 6, 2023
  2. NAIC. "Do You Know How to Use an Insurance Rider or Endorsement?." Accessed February 6, 2023
  3. FEMA | National Flood Insurance Program. "What flood insurance covers." Accessed February 6, 2023
Anna Baluch
Anna BaluchInsurance Writer

Anna Baluch is a Cleveland-based personal finance and insurance expert. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many publications, including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance. Connect with Anna on LinkedIn.