What is an insurance endorsement?

While most states mandate certain car insurance coverage types, other coverage types are optional. These optional coverage types, called endorsements, can modify your policy to fit your unique needs. Being aware of the types of insurance endorsement available, common ones to look out for and how to buy them can help you ensure you have the right coverage in place to protect your finances.

What is an insurance endorsement?

An insurance endorsement modifies your current policy with options or adjustments to suit your coverage needs. Each insurance company offers its own selection of endorsements.

Insurance endorsements cover the scope of additional modifications and coverage options to personalize an auto insurance policy. Insurance companies and industry professionals may also refer to insurance endorsements as add-ons or policy riders.

Types of insurance endorsements

Insurance endorsements are a good way to change certain terms of the policy without having to cancel or create a new policy to reflect the modifications. Some of the most common categories of insurance endorsements are:

Common car insurance endorsements

Even if you have never heard of the term before, endorsements are more common than you may think. Many insurance policies include one or more endorsements. The following are some of the most common:

Insurance endorsements for vehicle parts

Some vehicle owners make upgrades or modifications to a standard vehicle. These modifications may need an endorsement, especially if they are expensive. Otherwise, they may not be covered in case of a claim. Some of the most common insurance endorsements for vehicle parts are:

• Original equipment manufacturer (OEM): The endorsement allows for reimbursement of repairs using original factory parts, which are typically more expensive than aftermarket parts.
• Custom equipment: Tinted windows, custom wheels and rims or a luxury audio system may be considered custom equipment and could be endorsed to ensure replacement if a covered loss occurs.
• Glass: If your windshield is damaged from road debris or a window is cracked, a glass repair endorsement could provide coverage. Windshield repair coverage often comes with a very low deductible (if any). The endorsement may even include home service, which sends a mobile glass technician to replace or fix a windshield at your location.

Insurance endorsements for new, financed or leased vehicles

As mentioned in the introduction, there are times when you may be required to carry extra coverage, such as when you finance or lease your vehicle. Full coverage is typically required in these instances to ensure the vehicle is financially accounted for, since the lender’s name would be on the title. Some endorsements you may consider adding include:

• New vehicle replacement: If your new vehicle is considered a total loss following a covered accident, this endorsement could pay to replace it with one of the same make and model. New vehicle replacement is only available on new vehicles up to a set limit, usually under one to two years or less than 15,000 miles.
• Commercial use: If you ever use your vehicle for business purposes, like delivering pizzas, this coverage could be useful in ensuring you are covered in accidents. If your vehicle is owned or strictly used for business purposes, a separate business auto insurance policy may be more beneficial.
• Gap insurance: This option kicks in to pay the difference between what you owe on the vehicle and what the insurance company pays you if the vehicle is declared a total loss.

Specialty car insurance endorsements

Some endorsements are based on the type of vehicle or special coverage circumstances.

• Antique car: Classic or antique vehicles that have uniquely high values or require specialized vehicle repairs may benefit from a policy endorsement. The value of the endorsement may need to be determined through professional appraisal.
• Import: Vehicles imported from other countries may require a special endorsement if they were not purchased from a local dealer and were sent by the owner from another country instead.
• Rideshare: Drivers who work as a driver for rideshare services such as Uber or Lyft, or food delivery services such as Postmates or DoorDash, could benefit from special car insurance for when they are using their vehicle “on the clock.”

Less common car insurance endorsements

Some insurers offer less common car insurance endorsements, which some policyholders may find beneficial. These endorsements can include:

• Pet injury: If your pet is in the car with you when you get into an accident and is injured or killed, this coverage would pay for vet care or funeral costs up to the coverage’s limits. This should not be confused with pet insurance, which acts like health insurance, covering your pet’s qualifying accidents and injuries.
• In-home care costs coverage: If your injuries are substantial enough that you require in-home care assistance, this endorsement could provide coverage to pay for the cost. In-home care can include help with bathing, dressing, light housekeeping and transportation.
• Better car replacement: If your car is totaled, better car replacement provides compensation for a vehicle one year newer that has 15,000 fewer miles than your car that was totaled. This differs from new car replacement, which gives you the funds for the same make and model that was totaled.

How much do insurance endorsements cost?

Car insurance endorsements that add coverage typically come with a cost. However, exclusion endorsements or modifications to a policy do not cost extra. Many endorsements such as roadside assistance or collision damage waiver have minimal charges of a few dollars per month. While each add-on is priced depending on the extent of coverage it adds, endorsements are usually low cost compared to your policy, as the added coverage is usually very specific.

How to purchase an insurance endorsement

Purchasing an insurance endorsement is typically simple and can be handled online, over the phone with your car insurance company or agent or by visiting your local agent’s office. To buy an endorsement, you could follow these steps:

1. Research the type of endorsement you are interested in: Many endorsements are published on insurance companies’ websites. Be sure to read the terms and conditions to understand if there are eligibility requirements or limitations to the endorsement.
2. Find out how much the endorsement will cost: In the case of an insurance add-on, such as a gap or rideshare insurance, you may need to call the carrier or agent to find out how much it will cost to add the optional coverage.
3. Request the endorsement: Depending on the insurance company, you may be able to add the endorsement online or through the mobile app. Otherwise, contact your agent or a representative to add the endorsement.
4. Verify the coverage: Once you add the endorsement, verify that it appears on your policy and the information is correct. If you find any errors or omissions, reach out to your carrier right away to correct it.

Frequently asked questions

• • Do endorsements have deductibles?

    Some endorsements have deductibles or a fee you have to pay for the service, such as roadside assistance coverage. Whether an endorsement has a deductible depends on the specific endorsement and what coverage it provides or excludes on the policy.

  • How long is an endorsement valid?

    When you add an endorsement to your insurance policy, it stays valid as long as the policy does, or until it is removed from the policy. If there is a time limit for the endorsement, it should be listed in your policy details. An endorsement can often be renewed with your policy, as long as certain requirements are met. For instance, a new car replacement endorsement may only apply while your car is a certain age or has a particular mileage limit, which means it will be removed once the age or mileage has reached its limit.

  • When can I add an endorsement to my insurance policy?

    Typically, you can add an endorsement to your insurance policy at any time. The policy can be endorsed when it first begins, at the policy renewal or at any time during the policy period. For example, if your policy renews in April, but you buy a new car in February, you can add the new car and new car replacement endorsement when you buy it in February. If the endorsement still qualifies, the policy would automatically renew with it included.

  • Are endorsements mandatory?

    Most endorsements are voluntary and are only included with your policy if you want or require it. However, in the instance of an excluded driver endorsement, these are usually mandatory if requested by the insurer. The insurance company is giving you the option to either name the driver as an excluded driver or have your policy canceled or nonrenewed.

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