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 generally either a form of additional coverage, but can also be used to specify exclusions. Endorsements may allow homeowners to add extra coverage onto an existing policy instead of having to buy a separate policy. If you have a homeowners insurance policy, learning about endorsements can help provide insight into what is and isn’t covered on standard policies.
Some endorsements are common, while others may be more unique. More common ones tend to be outlined similarly between insurance companies, although there may still be differences. Keep in mind, endorsements that add coverage will generally increase your home insurance costs.
Common types of homeowners insurance endorsements
One standard use of endorsements is to gain additional coverage for specific perils that are often excluded. Another frequent practice is to include coverage for specific possessions that would not usually be protected. Whether looking to add coverage for earthquakes, valuable art and jewelry, or for an expensive aspect of your garden landscaping, endorsements may be one way to accomplish that.
Flood insurance is unique because it is government-issued and FEMA administers the National Flood Insurance Program (NFIP). Private insurers often offer these policies on behalf of FEMA for homeowners that want or need flood insurance. Speak to your insurance company to see if flood insurance can be added to your existing home policy as an endorsement, although it will typically be available as a standalone policy.
Learn more: Guide to flood insurance.
Damages sustained from earthquakes are often excluded from standard homeowners’ insurance policies. Without this coverage, homeowners can be left paying out of pocket to deal with any repairs or replacements in the wake of 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.
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 some insurance carriers include this type of coverage by default, it isn’t standard in all home insurance policies. This personal property endorsement helps when personal property items are damaged or destroyed and need replacement, following a covered loss. Unlike actual cash value coverage, which standard policies include, this coverage will typically pay for the replacement cost of an item. Suppose you have possessions that are significantly more expensive to buy new than used. In that case, this endorsement can be a helpful addition. The key difference is that actual cash value represents the item’s depreciation over time, while replacement cost does not.
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. With this endorsement, your policy can pay towards damages caused to your home and possessions by a sinkhole. This type of coverage can 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 coverage endorsements can help cover the costs if your service lines are damaged. This coverage can include phone and power lines and sewer, gas and water pipes. Without this endorsement, 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
While a standard home insurance policy may cover the cost to replace your stolen wallet, it 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 protection against these types of crime. Depending on the amount of coverage, you gain financial protection against debt falsely taken out in your name.
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. 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, 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 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 can help cover a loved one’s basic living expenses if they need assisted living accommodations.