If you are thinking about purchasing a house, one of the main things you should look into is which one is the proper insurance policy for your property. In general, we recommend all homeowners get a standard policy that offers all the basic protection. However, it can happen that sometimes the insurance can’t adapt to specific needs. In this case, you could get an insurance endorsement to modify or add coverage to your policy.
We know that right now some of you are wondering, what is an endorsement in insurance? Well, an endorsement in insurance is something that allows you to change the policy whenever you want during the term. The best part about this is that you won’t have to renew the coverage. But, it is important to keep in mind that once you get an endorsement, this could increase your premiums.
Usually, an insurance endorsement will have the same conditions as the rest of your policy. This means that the additional coverage will be in place until the policy comes to an end. There are some instances in which endorsement could have a specific time frame. That’s why once the endorsement is approved, you should compare it to the original policy. If you have any questions or concerns, get in contact with your insurance agent.
In case you don’t know when it is a good idea to get an insurance endorsement, below we will give you some examples. If you are a renter, we advise you to first look at some tenant’s insurance policies and ask if the provider can extend your coverage with an add-on — to do this, we recommend our favourite insurance company in the market, Surex.
Which type of coverage do I have without insurance endorsement?
Before getting an endorsement in insurance, it is crucial to look at the policy you have at the moment. To help you out during this process, we will do a quick breakdown of the protection you would find in a standard homeowner’s insurance policy.
- Dwelling coverage
The first thing that you will find in any homeowner’s insurance policy is the dwelling coverage. This is what will protect the structure of your home in case it gets damaged. Most of the time, this will include structures that are attached to your home, such as the deck. But, in other cases, this will be a separate part of the policy.
- Personal Property coverage
This coverage will pay for all the costs if your belongings get damaged or if they are stolen. It is vital to keep in mind that this protection has a limit, and some things could be excluded. For instance, some expensive sports equipment, musical instruments or even jewelry.
- Liability coverage
If someone gets hurt inside your home and sues you, then you can file a claim and the insurance company will pay for all the legal costs. Plus, if that person needs medical attention, your policy will also cover all the additional medical expenses.
- Additional living expenses
When a peril happens inside your home, such as fire, chances are you won’t be able to stay there while the property is being repaired. That’s why your insurance policy will issue you a payout to cover any hotel stay and meals.
Then, when should you get endorsement insurance? We will say whenever you feel that this basic coverage is not enough or when a specific peril is not covered. In the next section, we will explain the most common endorsements and the protection they offer.
Five Types of Insurance Endorsements
As we now know, an insurance endorsement acts like an additional document to your policy, but it does not change the original conditions of the coverage. This means you can think about it as an add-on. Because these are extra conditions, you should keep them attached to the standard policy. Right now, there are several endorsements you can get. Here is a shortlist of the most popular ones.
- Identity theft protection
In case you are wondering which endorsement insurance is worth getting, we would recommend this one. Identity theft is a serious problem that is becoming more common in the modern world we live in. That’s why even if you believe you have enough protection with the homeowner’s policy, it wouldn’t be a bad idea to purchase an identity theft insurance endorsement. This protection will allow you to cover all the legal fees, ID replacement and loss of income costs.
- Additional personal property coverage
As we explained above, when it comes to personal property coverage, there is a limit, which might not be enough if you have expensive items. For instance, all jewelry, electronics, pieces of art and musical instruments. If that is your case, you can get an endorsement in insurance. This will increase the limit of your policy. That means if a peril occurs, you don’t have to worry about covering all the replacing costs by yourself.
- Service line coverage
Usually, the protection that your homeowner’s insurance covers refers to any utilities that are located beneath your home. However, it does not include the service line itself. With endorsement insurance for service lines, you can cover the costs in case the sewer, water, drain, or natural gas pipes get damaged. But, it doesn’t stop there. This add-on can also protect cable, power and internet lines.
- Equipment coverage
There are several devices in your home that you need daily. For instance, your refrigerator, washer, oven, and water heater. If one of these devices gets damaged, it could become a nightmare. Plus, it could also be expensive trying to replace them. If you don’t want to worry about this, we will advise you to get equipment breakdown coverage, which could go up to $50,000.
- Food spoilage
It is common that during the cold months, there is a power outage due to harsh storms or an unexpected electrical malfunction. When this happens, your refrigerator could stop functioning, which means all the food inside will rot. This endorsement will help you cover the total cost of all the food you had at home. Usually, this coverage would go up to $500, which will be enough to restore all the food you had.