Adding Coverage to Get the Best Homeowners Insurance Policy

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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Before you finalize your home insurance policy coverage, make sure you have reviewed important insurance riders and have added those that would give you the extra coverage you may need. Without the right insurance riders to your homeowners insurance policy, you could find yourself paying out of pocket for your losses.

Supplement Your Home Insurance Policy Coverage

Home insurance riders are extra coverage added to your homeowners insurance policy to extend your level of coverage. Home insurance riders become necessary because limitations or exceptions that are in every policy. For example, the home contents insurance section of your basic policy pays for damaged or stolen jewelry by a covered cause of loss up to $1,500 per piece and $2,500 total incident. If your home was burglarized and several pieces of jewelry were stolen, all may not be covered. Worse, if you have a diamond ring worth $5,000 and the diamond fell out, this would not be covered as mysterious disappearance is not a covered cause of loss under a typical home insurance policy. However, a jewelry insurance rider covers mysterious disappearance and by scheduling a piece of jewelry on the home insurance rider, you would not be held to the policy limits that prevent full recovery

TIP: A rider may increase your home insurance premiums anywhere from 1%-20%. However, depending on the coverage you are modifying or adding, the increase may be well worth the coverage.

Common Home Insurance Riders to Consider

Before you add to your policy, review some of the basic home insurance riders below. If you have any specific questions, contact an experienced professional for assistance.

  • Scheduled personal property endorsement (personal property floater)- Personal property claims are limited to prevent people from making fraudulent or excessive claims after losing their valuables. Jewelry, guns, cameras, coin collections are all covered up to a certain amount but any individual item is only covered for a stated amount, regardless of actual value. If you have valuables in excess of the stated amount of coverage for these categories, you can add a personal property home insurance rider to cover the additional value of your high priced items. An appraisal for each item is necessary to insure them to the full value. The rider also removes the coverage cause of loss requirement, allowing things like mysterious disappearances to be covered.
  • Income property-Some insurance companies allow you to add a rider that covers residential premises other than your primary residence that you rent out as a landlord. As it is with your primary home, it is important to maintain insurance on rental property. Many insurance companies will allow you to add additional properties to your existing homeowner’s insurance.
  • Secondary residence premises endorsement-If you own a vacation home, it is important for you to maintain coverage for that residence as well as your primary residence. Like income property, many insurance companies offer secondary residence premises coverage as a rider to your homeowner’s insurance policy. You are often able to obtain the needed additional coverage at a reduced rate by purchasing this home insurance rider (as opposed to a separate, stand-alone insurance policy).
  • Theft coverage protection endorsement-Most insurance policies have strict limitations with respect to coverage of personal property loss due to theft. To expand the amount of insurance for personal property due to loss by theft, purchase a home insurance rider for additional theft coverage under your homeowner’s or renter’s insurance policy.
  • Home business-Having a home-based business presents a variety of exposures to loss. Many homeowners’ insurance policies exclude coverage for your home business. If you operate a business out of your home, make certain that coverage is available through your home insurance policy for items such as: computers, electronic equipment, and CD Data. If your home-based business and/or equipment exceed the limits of your policy you may be able to add this home insurance rider to your policy.
  • Watercraft and recreational vehicle endorsement-Most home insurance policies do not cover watercraft and other recreational vehicles commonly stored at your residence. In addition, these vehicles are often excluded under standard automobile insurance policies. To obtain coverage for loss of watercrafts and recreational vehicles, many insurance companies offer an optional home insurance rider.
  • Sewer and drains back-up– A backed-up sewer or drain can cause significant damage and may be excluded from the home insurance policy. Many insurance companies offer home insurance riders to protect against the risk. If your home has a sump pump or a septic tank, this rider is a must. Ask your agent about this coverage to ensure that you are properly covered.
  • Inflation Guard– This home insurance rider keeps the home’s value current with inflation by adding a certain percentage to the home values every year. Essentially this rider makes sure your home coverage is enough to pay for reconstruction in the case of total loss.
  • Guaranteed Replacement Cost Rider– This rider will guarantee replacement of the home at the cost to rebuild the home. It usually requires that you insure your home for 100% of its calculated replacement cost value.
  • Law and Ordinance– This rider covers the cost of restoring your home back to present day building codes and ordinances. Your basic homeowner’s insurance policy pays to restore the insured back to their original condition prior to the loss. However, because the reconstruction of your home would have to be up to today’s codes and ordinances, you would have to pay the difference between your home’s pre-loss value under the old codes and ordinances and its new value under the current codes and ordinances unless you have this rider.

When you have decided what you need out of your home insurance coverage, shop and compare quotes to find the best price on your policy and included riders. To get started with a free quote, click here and take advantage of the Free Advice quote center today.

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