Homeowners insurance protects your dwelling and your personal belongings, and it offers personal liability coverage for injuries that happen on your property. It can also provide additional living expenses if you need to temporarily relocate.
However, there are limits to coverage. That's where endorsements and floaters enter the picture, with the option to add more coverage to your policy.
What Are Home Insurance Riders?
Home insurance riders are optional coverage add-ons that you can purchase to customize coverage from a standard home insurance policy. Riders allow you to tailor a home insurance policy to best meet the needs of your household.
How Riders Extend Your Standard Home Insurance Policy
Homeowners insurance protects your home and belongings from damage caused by an insurance peril. A peril is an event that may damage your home or belongings, like theft, fire, or a storm. Even if the damage is caused by an insurance peril, there may be limits or exclusions to coverage.
When there are coverage limits or exclusions, the homeowner will often have the option of adding an endorsement, also known as a rider or a scheduled floater, to their policy for additional coverage.
Why You Might Need Additional Coverage
An endorsement (or rider) is an amendment or change to the policy that adjusts the coverages. A scheduled floater typically only covers a certain item or thing.
For example, personal property coverage protects your belongings and furnishings and usually maxes out at $100,000, but if you have specialty items like high-end electronics, jewelry, or fine art, these will be excluded from basic coverage and require add-on coverage known as a personal effects rider or separate jewelry insurance.
A personal effects endorsement or rider would be applied to all of your personal effects. However, if you only have one expensive jewelry piece (such as a wedding ring), then instead of a personal effects endorsement, you can get a scheduled floater just for your wedding ring.
Both endorsements and floaters make changes to the policy, but a floater has limited scope — such as just your wedding ring — whereas an endorsement would impact all of your personal effects. As the Insurance Information Institute notes, although a floater is more expensive than an endorsement, it offers more comprehensive coverage.
How Much Do Home Insurance Riders Cost?
Generally, home insurance riders are considered affordable and inexpensive. The cost varies based on the type of rider. However, for jewelry or other high-value items, you can expect to pay between $1 to $2 per $100 of value, according to Hippo Home Insurance. So, if you have a watch that’s valued at $6,000, you can expect to pay between $60 and $120 for the additional coverage.
Insurance company Allstate said that when adding an endorsement, you may be able to choose a lower deductible or no deductible for the items the endorsement covers. For things covered under your standard policy coverage, the deductible remains the same.
For most standard homeowners insurance policies, the standard deductible for every claim filed is between $500 and $1,000. If you have a claim for an endorsement or floater item, like jewelry, you will have to pay whatever that deductible is, not the standard deductible.
Each insurance company handles endorsements and floaters differently, so be sure to talk to your provider to understand if there are different deductibles and how they work.
Popular Home Insurance Riders & What They Cover
Remember that endorsement riders and floaters are add-ons to your insurance policy, incurring an additional cost that will increase your premium. Some insurance providers may include some of the items listed below as part of your policy, while others may not.
Coverage varies depending on your carrier, so be sure to check with your insurance agent.
Hurricane Insurance Rider
Hurricane insurance refers to the coverage necessary to cover hurricane damage, such as that from high winds, storm surges, or flooding. As a major natural disaster, hurricanes can do a lot of damage in select areas. Wind coverage and flood insurance — collectively referred to as hurricane insurance — offer protection in these isolated events.
If you have a mortgage, your lender will require hurricane-specific coverage in certain states, such as Florida and Texas. If you pay cash for your home, an insurance professional can help you build a plan that meets your needs. After all, nobody wants to be stuck paying for six-figure home repairs alone.
Fire Insurance Rider
Most standard homeowners insurance policies come with coverage that protects your home from fire damage. You can also buy separate fire insurance to supplement your existing coverage if you have a second home or live in an area that's more susceptible to forest fires.
In California, for instance, more than 2 million properties are at high to extreme risk of being damaged by a wildfire, according to Verisk, an insurance risk data analytics company. Other states with elevated wildfire risk levels include Texas, Colorado, and Arizona.
Fire insurance pays for repairs and replacement if a fire damages your home, says Brian Greenberg, founder and president of Insurist, an insurance comparison platform. Additionally, fire insurance riders can pay for temporary housing and smoke damage. It is most likely already included in your homeowners insurance policy but can be purchased as stand-alone coverage if necessary.
Flood Insurance Rider
Homeowners insurance offers protection for homeowners' belongings and for the home itself, but only from certain perils. Many policies protect against windstorm damage, but not water damage from flooding. Also, if you live in a FEMA-designated flood zone, you will be required to purchase flood insurance.
So, in order to protect your property from hurricanes, you will likely need a combination of standard homeowners insurance (potentially with additional windstorm coverage through a rider) and flood insurance.
Below, you'll see when flood insurance would apply and when your homeowners insurance would kick in (with the proper riders).
| Damage | Homeowners Insurance | Flood Insurance |
| Sump pump | Yes | No |
| Sewer water | Yes | No |
| Basement water | Yes | No |
| Broken pipes | Yes | No |
| Rainwater from window or windstorm (not classified as a hurricane) | Yes | No |
| Accidental discharge of water or steam | Yes | No |
| Flood | No | Yes |
| Windstorm or hail | Yes | No |
| Ice, snow, sleet | Yes | No |
Jewelry Insurance Rider
A so-called floater policy offers higher limits and broader protection for your expensive items, like accidental or unexplained losses for jewelry, which your homeowners or renters insurance policy may not match.
For example, if you leave your diamond ring in another country and can't recover it, you can file a jewelry claim for mysterious disappearance.
Olsen says a significant benefit of a stand-alone jewelry policy is that any claims you make will not affect your homeowners insurance rates. "If your high-value items are listed on your homeowners policy as scheduled personal property, any claim created in relation to that item will show up as a homeowners claim, impacting your rates for homeowners insurance in the future," he says.
Switching insurance companies to get away from a previous jewelry claim wouldn't necessarily lower your rates. Your history of claims will follow you.
Tornado Insurance Rider
Tornado insurance refers to the coverage necessary to insure against damage caused by tornadoes. Tornadoes typically cause damage through winds and hail, though water damage can occur as well.
Damage to your home from wind and hail is usually covered under your homeowners insurance as an insurance peril. A peril is an event that may damage your home or belongings, like theft, fire, or a storm. The type of peril coverage you have depends on the type of homeowners insurance you purchased. Common insurance perils include fire, lightning, theft, ice, snow, sleet, wind, hail, smoke, vandalism, and freezing.
If you live in "tornado alley," you may need additional coverage for damage due to high winds. According to the National Center for Environmental Information, Tornado Alley refers to "an area in the southern plains — the region from central Texas, northward to northern Iowa, and from central Kansas and Nebraska east to western Ohio — that consistently experiences a high frequency of tornadoes each year."
Homeowners insurance offers protection for homeowners' belongings and for the home itself. Unlike car insurance, homeowners insurance is not required by state law. However, if you have a mortgage, your lender will require homeowners insurance to protect the investment.
Although standard homeowners insurance covers wind and hail, it doesn't cover extreme or high winds like those from tornadoes or hurricanes. If you live in an area where tornadoes are common, you may need additional windstorm insurance.
Other Common Home Insurance Riders
Earthquake Insurance
Earthquake insurance protects your property from damage caused by perils listed in your policy. While your lender may require homeowners insurance if you have a mortgage on your home, you don't have to purchase earthquake insurance.
In California, lenders won't require you to have earthquake insurance, but earthquake insurance providers must offer earthquake insurance to new homebuyers by law, according to Glenn Pomeroy, chief executive officer of the California Earthquake Authority — the nation's largest earthquake insurance provider.
Like flood insurance, homeowners insurance will not cover damages from earthquakes. You must purchase additional coverage to protect your home and belongings from damages caused by an earthquake event. Note that there are a few scenarios where earthquake insurance won't cover earthquake-related damages.
Sewer Backup Insurance
This type of insurance protects against water damage from backed-up sewer lines, drains, or septic tanks. Some standard home insurance policies may already cover sewer water. However, if yours doesn’t, then sewer backup insurance could be worth purchasing.
Home Business Insurance
If you run a daycare or operate a business from home, you will need extra coverage. This is not the same as working remotely for an employer. Home business insurance will cover damage or loss of equipment as well as provide liability protection.
More Insurance Riders
- Pets: Exotic pets and certain dog breeds are excluded from personal liability coverage, requiring an umbrella policy.
- Service line: Covers the costs to repair service (utility) lines that run from the home to the street.
- Equipment breakdown: Covers the costs to repair or replace costly household appliances like an HVAC. This shouldn't be confused with a home warranty.
- Landscaping and shrubbery: Although fire damage is a covered insurance peril, in states where wildfires are prevalent, some standard homeowners insurance policies limit coverage for plants, trees, and shrubbery.
- High-end electronics and sports equipment: Similar to jewelry, you may be required to submit an appraisal.
- Identity theft: Helps you recover from losses related to fraud or cybercrime.
- Cyber liability: This is more expansive than identity theft, keeps your personal data secure, and protects you from cyber crimes. Cyber liability coverage will vary depending on your carrier.
- Guaranteed replacement cost: Instead of depreciated actual cash value (ACV) when your belongings are damaged, replacement cost is the cost to replace the item with a new or used product.
How to Choose the Right Home Insurance Riders
Assessing Your Home’s Risks & Location
When it comes to deciding which riders to add to your home insurance policy, consider your potential risks. For instance, if you live in an area prone to hurricanes, then you’ll want to look into buying hurricane insurance and flood insurance. If you have a lot of heirloom jewelry that your grandmother handed down to you, then additional jewelry coverage is likely worth it.
It’s important to choose the right amount of coverage with a deductible that’s within your budget to avoid the financial burden of a loss.
Understanding Policy Limits & Exclusions
Carefully read through the fine print of your home insurance policy to determine its limits and exclusions. Once you identify the limits and exclusions of your policy, you’ll have a clear understanding of what’s covered and what’s not covered. This will give you a better idea of what kind of insurance riders you’ll need to purchase.
How to Get the Best Price on Home Insurance Riders
The first step to adding a home insurance rider should be to contact your current insurance provider to ask about options and get a quote.
However, the best way to find a great deal is to shop around and compare quotes from multiple providers. Many experts recommend getting quotes from at least three different insurance companies to conduct a fair comparison and find the best deal.
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FAQs
What is a home insurance rider?
A home insurance rider is additional coverage you can add to your existing policy that's designed for specific risks, such as hurricanes, floods, or jewelry.
Does homeowners insurance cover flood damage?
Yes, most standard homeowners insurance policies don't cover flood damage. You should consider purchasing a separate flood insurance rider or policy.
How much does a jewelry insurance rider cost?
The cost of a jewelry insurance rider depends on the value of your jewelry. However, annual premiums are typically around $1 to $2 per $100 of coverage.
Is tornado damage covered by standard homeowners insurance?
Some standard home insurance policies cover wind damage. However, if you live in a tornado-prone area, a tornado insurance rider will provide additional protection.
How do I add a rider to my home insurance policy?
You can add a rider to your home insurance policy by calling your current insurance provider to discuss riders, coverage options, and get a quote to update your home insurance policy.
