What Is an Insurance Endorsement or Rider?
By Iris Turner, Commercial Lines Agent
If you have an insurance policy, you may have heard the term “endorsement” or “rider.” But what does it mean? In the simplest terms, it’s just something that alters your existing policy by adding, modifying, or deleting coverage.
Endorsements allow policyholders to customize their protection according to their needs and their budget. They are often used in higher-risk situations where standard coverage may not be enough.
One common type of endorsement is the “named-perils rider,” which expands on the traditional coverage offered by most policies. It provides for greater protection for certain types of risks that would otherwise not be covered under a policy. Some examples would be things like water damage from a plumbing leakage, theft, fire or other perils that can cause extensive losses to individuals or businesses alike.
Endorsements can also be used to delete certain types of coverage from a policy. An example would be if an individual has purchased a homeowners insurance policy but wishes to keep their valuables safe with a separate policy. This coverage on their homeowners policy can be removed.
When it comes to pricing, endorsements can add substantial cost to the initial premium depending on factors like age and health status of the insured person, as well as what type of rider is added onto the policy. This cost is calculated in order for the insurer to adequately cover any potential losses associated with a claim should it ever arise against them later down the line.
In conclusion, insurance endorsements or riders offer great flexibility when it comes to customizing your insurance policies, giving individuals greater peace of mind knowing they are fully protected against any unforeseen circumstances despite how unique these situations might be. It’s important, however, to carefully consider your options before making any decisions regarding adding endorsements to your plan, as there could be significant differences between the choices available both financially and with regard to scope of protection provided by each option.
If you have further questions about endorsements – or any other burning insurance questions – please get in touch. We’d love to help.