Homeowners Insurance Riders: What to Know

Is your homeowners insurance sufficient to cover all your needs? Depending on what you have to cover and whether or not you have any additional riders on your policy, it may not be. How can you ensure the right coverage for your particular case? One important tool is known as an insurance rider. What are riders? And what riders can you or should you buy? Discover what you need to know.

What Are Insurance Riders?

Insurance riders are special addendums (called endorsements) attached to a policy that cover specific issues, such as covering something specifically excluded from the main policy. Riders are an easy way to customize your insurance coverage without purchasing multiple policies. And because they are bundled with the main policy, they are often a less expensive way to increase insurance. 

How Do Riders Increase Limits?

What types of riders can you purchase? Certainly, the largest category of riders bought is to avoid hitting coverage limits on high-value items. Most homeowners policies have an overall dollar limit for your main coverage but also individual limits on some categories of personal property. If your stuff within this category is more valuable than the limit, it won't be fully covered.

Jewelry is a good example. Many homeowners insurance policies stipulate a fairly low limit for jewelry in a covered loss. It may be a maximum of $2,000 for each item and $5,000 for the collection, for instance. But today's engagement rings alone are often worth more than that. You might solve this problem by getting a rider to raise the coverage for the whole collection or just a higher limit for the engagement rings. 

Other common endorsements to increase coverage include expensive firearms collections, collectibles and antiques, high-end rugs, furs, historical artwork, or even musical instruments. 

How Do Riders Add Coverage? 

The other type of rider many people choose is to add coverage that doesn't otherwise exist. If you leave your home to travel for more than two months, your home insurance might not cover losses because the house is considered vacant or uninhabited. But a vacant home insurance rider would kick in to fill the gap in protection.

Discover some other riders you may need to consider:

• Home business coverage: This ensures your home-based business materials are covered. 
• Sewer and drain backup coverage: This protects you from a costly flood cleanup that's often not included in primary policies. 
• Food spoilage coverage: This helps in case you lost significant perishable foods during a power outage. 
• Identity theft coverage: This pays for you to protect and reestablish your identity.
• Boat coverage: This increases loss protection no matter where the boat is located. 

Riders are clearly unique to each homeowner's situation. Some people may need several endorsements while others may only need to boost coverage in one area. 

Are Riders Cost-Effective?

The good news is that riders are generally inexpensive additions to the main policy. They may only add a few dollars to each payment. If it will cost you $4,000 to $10,000 to replace your baby grand piano, a few dollars per month is a small price to avoid this. However, it may not be cost-effective if you can easily afford to spend $1,000 to replace your simple upright piano.

Where Can You Learn More?

Do you need to address special insurance situations through riders? If so, start by learning more about the options available and how much each might cost. Illinois Insurance Center can help. We offer a wide variety of homeowners insurance policies and endorsements for Chicago area residence. Make an appointment today to meet with an insurance agent and review your needs.