Homeowners may feel they have adequate coverage through their home insurance policy until something bad happens, and they realize they have to either take a financial loss or they’re going to have to pay from their own pocket to replace or recover an item. By adding special provisions, called Riders (floater or endorsement), you can ensure that any items that have low limits, or are excluded from the original policy, will be covered and your investment will have an added measure of protection.
By adding riders to your policy, it will increase the cost of your premium, since it expands the coverage; however, you may find that it is well worth it, since most typical home insurance policies will not provide any or much coverage for certain items that you consider valuable. You will have to determine if it’s better to purchase additional coverage in the form of a rider, or just front the cost of replacement later. The most common riders are for these household items:
● Personal Property Floater, includes money that is lost or stolen (most policies cap the limit at $100), Jewelry (each piece of jewelry should be appraised, and will be covered from damage and theft/loss; normal policies don’t cover theft and offer a $1,000 cap on jewelry), Antiques, Art work (although home insurance can cover most of the costs, those with very rare or expensive art may want more full coverage), Silverware, Oriental rugs, Firearms, Collectibles, Furs…
● Sewage Back-up (this also includes lines or pipes that are blocked by tree roots)
● Home Office Equipment/ Electronics
● Income Property – for homes that aren’t your primary residence and serve as a means of rental income
● Home Business
● Theft – most typical home insurance policies have exclusion for property loss by theft.
● Watercraft and personal recreational vehicle
● Guaranteed Replacement Cost, which will provide a replacement of the value of the home
A rider is especially important if you own some pricey and expensive valuables, such as the ones listed above. It’s smart to customize your insurance policy to your specific needs to protect you and your belongings, in the case that something happens. While reviewing what riders you would consider adding to your home insurance policy, note that there are some that experts have deemed, “not worth it:”
● Critical illness riders are criticized for the loopholes and warnings that don’t provide coverage for all the risks.
● And the business pursuits rider is intended to be used for home businesses, but the better alternative would be to purchase a business insurance policy.
Also, if you happen to sell or downsize your household and belongings, you will want to update your policy and riders accordingly so you’re not paying for unnecessary coverage. Likewise, if you acquire something that will need that extra coverage that a rider offers, don’t wait until the policy renewal period, get in touch with your insurance agent to discuss when to add the item and how it will affect your overall premium pricing.