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Home insurance endorsements are coverage options policyholders can add on to improve their existing homeowners policy without having to buy a separate standalone policy. Knowing what your homeowners insurance policy covers and what it doesn’t may help you decide what endorsements to include. Each insurance company determines its own set of endorsement options, but some are common across many carriers. Keep in mind, endorsements that add coverage will generally increase your home insurance costs.
What is a home insurance endorsement?
A home insurance endorsement is a change to the policy that modifies or endorses the existing policy without having to renew or replace it. Homeowners insurance endorsements can also be called riders or add-ons. They are optional coverage types that enhance your policy, usually at an added cost. Making them optional allows insureds who do not need the coverage to opt out and save money rather than pay for coverage that they do not need. Note that available endorsements will vary by company, and some coverage types that are endorsements with certain carriers may be automatically included in standard policies from others.
Common types of homeowners insurance endorsements
One common use of endorsements is to provide additional coverage for specific perils that are often excluded from a standard home insurance policy. Another frequent practice is to include coverage for specific possessions that would not usually be financially protected. Whether you’re looking to add coverage for earthquakes, valuable art and jewelry, or an expensive aspect of your garden landscaping, endorsements may be one way to accomplish that. Some of the most common home insurance endorsements are included below.
Damage from earthquakes is often excluded from standard homeowners insurance policies. Without earthquake coverage, homeowners may be left paying out of pocket to deal with any repairs or replacements in the wake of an earthquake. Assessing your risk may help determine if you need earthquake coverage. Many companies will allow policyholders to add an earthquake endorsement to include this peril in their coverage. California is the state most at-risk for earthquakes and often requires a separate earthquake insurance policy. Californians may be able to purchase separate earthquake insurance through the California Earthquake Authority or through private insurers.
Learn more: Guide to earthquake insurance.
Many types of wind damage are covered in standard home insurance policies. However, some parts of the country are less likely to include this coverage by default. Not only that, but the coverage in standard plans often excludes certain types of wind damage. For example, tornadoes and hurricanes are often excluded but can often be added onto policies through this type of endorsement. Many standard policies also exclude named storms unless modified through endorsements.
Learn more: Guide to windstorm insurance.
Sewer backup/water backup coverage
Because these damages often fall under the category of things that can be prevented through 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 of the damages and costs related to sewer backups.
Learn more: Guide to sewer and water backup insurance.
Personal property replacement cost coverage
While most standard home insurance policies include personal property coverage, replacement cost coverage isn’t included in all home insurance policies. This additional personal property coverage may ensure that you can pay to replace your personal items at the current market value, rather than depreciated cash value following a covered loss. For example, imagine you have a five-year-old television that is destroyed during a covered peril. Replacement cost coverage may provide enough coverage for you to buy a new television rather than simply paying the estimated value of the old television. This may save you from paying the gap between the old television’s cash value and the value of a new one out of pocket.
It’s common for damages from sinkholes to be excluded from standard home insurance policies. While rare in most areas, sinkholes can lead to expensive repairs if they do occur. States with karst landscapes—soluble carbonate rock topography—are more susceptible to sinkholes than other states. With this endorsement, your policy will cover damages caused to your home and possessions by a sinkhole. This type of coverage may also pay towards repair costs for your foundation and for stabilizing the affected ground around the damaged area.
Learn more: Guide to sinkhole insurance.
Service line coverage
Service line endorsements may help cover the costs if your service lines are damaged. This coverage may include phone and power lines as well as sewer, gas and water pipes. Many standard home policies do not fully cover the repair or replacement of these items. These endorsements only cover the service lines up to the edges of your property and stop where city property begins.
Identity theft coverage
A standard home insurance policy may cover the cost of replacing your stolen wallet, but it likely won’t pay for the damages done if the thief uses personal information within your wallet to take on debt in your name. With identity theft coverage endorsements, your policy gains a more robust measure of financial protection against these types of crime. Depending on the amount of coverage, an identity theft endorsement may help pay for identity restoration and more robust identity theft protection following a breach.
Learn more here: Guide to identity theft insurance.
While it’s standard for home insurance policies to cover stolen or damaged property up to a dedicated amount, that amount may not always be enough. You might consider insuring expensive possessions, like jewelry and high-end electronics, with additional coverage limits. Due to these items’ higher value, a standard policy may only cover up to a fraction of their cost. With a scheduled personal property coverage endorsement, you can add specific items at their full value.
Learn more here: Guide to scheduled personal property insurance.
Other homeowners 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, you could consider speaking to a licensed agent from your insurance company to help you make the most of your future policy. If you don’t have a policy yet or are planning to switch providers, consider comparing endorsement options from some of the best home insurance companies to find the best coverage and rate for you.
- New home construction endorsement: This endorsement is also known as dwelling under construction and builder’s risk. It covers the home and materials while the structure is under construction.
- Functional replacement cost: Instead of replacing a specific item, this helps you replace the function of that item. This endorsement allows for a lower valuation of items than standard replacement costs, although it must meet roughly the same level of function as the original.
- Assisted living facility coverage: These endorsements may help cover a loved one’s basic living expenses if they need assisted living accommodations.
- Ordinance or law coverage: This coverage pays for the extra construction costs to comply with local building ordinance or law codes if your home needs to be repaired or rebuilt after a covered loss. If you live in an older home or in a state that has strict building code requirements, you might consider adding this endorsement to your home policy.
Frequently asked questions
Some carriers offer flood insurance as an endorsement, but more commonly, you will need to purchase a separate standalone policy to get flood coverage. Flood insurance may be available to you through private insurers or through the National Flood Insurance Program (NFIP). Flood insurance may be complex and costly, so it may help to speak to your insurance company to discuss your flood risk and how to buy flood insurance.
Learn more: Guide to flood insurance.
The cost to add endorsements to your home insurance policy can vary by carrier, endorsement type, coverage amount, state and deductible. Some endorsements, like sewer backup and sewer line coverage, are typically a flat fee to add. On the other hand, a scheduled personal property endorsement for things like jewelry, antiques or fine arts, may fluctuate in cost based on the value of the items you are insuring.
Although some carriers may advertise their home insurance endorsement options online, the best way to understand all the endorsements your home insurance company offers is likely to ask. Endorsements from each carrier may vary by state. When you get a copy of your policy renewal, there may be an extra page that includes optional endorsements you can add to your policy. Speaking with your insurance agent may quickly help you identify which endorsements are available and how they may apply to your coverage needs.
What home insurance endorsements you need depend on your home characteristics, risk factors in your region and your personal coverage preferences. If you have high-value items, you may want to include extra personal property coverage to insure them for their replacement cost value. If you live in an older home or a state with strict building codes, ordinance coverage may be useful for you. Speaking with your insurance agent may help you identify which endorsements could be worth adding to your home insurance policy.