Endorsements to home insurance policies | The bank rate

Home insurance endorsements are tools with which your insurance company can modify your policy. Generally, these are optional components that customers can choose from. These modifications are usually either a form of additional coverage, but can also be used to specify exclusions. Endorsements can allow owners to add additional coverage to an existing policy instead of having to purchase a separate policy. If you have a home insurance policy, learning more about endorsements can help you better understand what is covered and what isn’t covered with standard policies.

Some mentions are common, while others may be more unique. The most common tend to be described the same way between insurance companies, although there may still be differences. Keep in mind that endorsements that add coverage will generally increase your home insurance costs.

Common Types of Home Insurance Endorsements

A standard use of endorsements is to obtain additional coverage for specific perils that are often excluded. Another common practice is to include coverage for specific assets that would typically not be protected. Whether you’re looking to add earthquake coverage, valuable artwork and jewelry, or an expensive aspect of your yard landscaping, endorsements can be one way to do it.

Flood insurance

Flood insurance is unique because it is issued by the government and FEMA administers the National Flood Insurance Program (NFIP). Private insurers often offer these policies on behalf of FEMA for homeowners who want or need flood insurance. Talk to your insurance company to see if flood insurance can be added to your existing home policy as an endorsement, although it’s usually available as a stand-alone policy.

Learn more: Guide to Flood Insurance.

Earthquake coverage

Earthquake damage is often excluded from standard home insurance policies. Without this coverage, homeowners may find themselves paying out of pocket to meet repairs or replacements following an earthquake. Many companies will allow policyholders to add an earthquake endorsement to include this peril in their coverage.

Learn more: Guide to earthquake insurance.

Storm cover

Many types of wind damage are covered by standard home insurance policies. However, some parts of the country are less likely to include this coverage by default. Not only that, but standard plan coverage often excludes certain types of wind damage. For example, tornadoes and hurricanes are often excluded, but can often be added to policies with this type of endorsement. Many standard policies also exclude named storms unless modified by endorsements.

Learn more: Guide to storm insurance.

Sewer backup/water backup cover

Because these damages often fall into the category of things that can be avoided with regular maintenance, they are usually excluded from standard home insurance. Yet water and sewer backups do happen, and for a variety of reasons. City infrastructure and local weather events can sometimes combine to contribute to sewer backups. This endorsement adds coverage for many damages and costs related to sewer backups.

Learn more: Guide to sewer and water backup insurance.

Personal Property Replacement Cost Coverage

Although some insurers include this type of coverage by default, it is not standard in all home insurance policies. This personal property endorsement is useful when personal property is damaged or destroyed and needs to be replaced as a result of a covered loss. Unlike actual cash value coverage, included in standard policies, this coverage will generally pay for the cost of replacing an item. Suppose you have goods that cost much more to buy than used. In this case, this approval can be a useful addition. The main difference is that the actual cash value represents the depreciation of the item over time, unlike the replacement cost.

Learn more: Guide to personal property cost new insurance.

chasm cover

It is common for sinkhole damage to be excluded from standard home insurance policies. Although rare in most areas, sinkholes can lead to costly repairs if they occur. With this endorsement, your policy can cover damage to your home and property caused by a sinkhole. This type of coverage can also cover the cost of repairing your foundation and stabilizing the affected soil around the damaged area.

Learn more: Guide to chasm insurance.

Service line coverage

Service line coverage endorsements can help cover costs if your service lines are damaged. This coverage may include telephone and electrical lines and sewer, gas and water lines. Without this endorsement, many standard home insurance policies do not fully cover the repair or replacement of these items. These endorsements only cover service lines to your property lines and end where city property begins.

Identity theft coverage

While a standard home insurance policy may cover the cost of replacing your stolen wallet, it won’t pay for damages if the thief uses personal information in your wallet to run up debt on your behalf. With identity theft coverage endorsements, your policy has a stronger measure of protection against these types of crimes. Depending on the amount of coverage, you get financial protection against debts wrongfully incurred in your name.

Learn more here: Identity Theft Insurance Guide.

Coverage of valuables

Although it is common for home insurance policies to cover stolen or damaged property up to a dedicated amount, this amount may not always be enough. Consider insuring big-ticket items, like jewelry and high-end electronics, with additional coverage limits. Due to the higher value of these items, a standard policy can only cover a fraction of their cost. With a scheduled personal property insurance rider, you can add specific items to their full value.

Learn more here: Guide to Scheduled Home Insurance.

Other home insurance endorsements

There are many home insurance endorsements beyond what has been covered here. Some may be unique to a few niche insurers, while others are more widespread. When shopping for insurance coverage, consider speaking with a licensed agent from your insurance company to help you get the most out of your future policy. If you don’t already have a policy or are considering switching providers, consider comparing some of the best home insurance companies to find the best coverage and rate for you.

  • New home construction endorsement: This endorsement is also called housing under construction and construction site risk. It covers the house and materials while the structure is under construction.
  • Functional replacement cost: Instead of overriding a specific element, it helps you to override the function of that element. This addendum allows items to be valued below standard replacement costs, although it should meet approximately the same level of function as the original.
  • Coverage of assisted living facilities: These endorsements can help cover basic living expenses for a loved one if they need assisted living.

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Justin D. O'Neill