Everything has its limits, including home insurance. A standard home policy is written to insure the average household in the general population. It usually comes with a set of standard protections, such as dwelling coverage (excluding contents and land), other structures coverage (like your fence), personal property coverage, and personal liability coverage (covers legal expenses if you’re responsible for damages or injuries to others).
The abovementioned coverages are limited to basics since typical homeowners insurance policy is designed to be reasonable. If you’re unsatisfied with these, invest in property riders, also called endorsements, on top of your standard home insurance coverage. A rider or endorsement increases your coverage limits, expands coverage for a specific property, or extends protection to help cover additional perils.Here are a few of the common homeowners insurance riders that you can add to your policy:
Water Backup Coverage
Water backup damages are among the top most expensive claims, alongside fire and liability lawsuits. These damages include clogged sewer lines, failed sump pumps, and backed-up drains, which can flood your house and even bring various water-borne materials with them. That’s why homeowners want to fix these water backup damages as soon as possible.
The problem is that arranging for cleanups and repairs for water backup damages is very costly. Even worse, they aren’t usually covered by most standard home policies. This is why it pays to invest in a water backup endorsement, one of the most overlooked home insurance riders.
Depending on your risk exposure and the limits you opt for, its costs usually range between $50 to $250 annually, much less than what you’ll probably spend on water backup cleanups and repairs.
High-Value Items Coverage
Most easily movable items with exorbitant market value can easily be stolen. Hence, most standard policies generally have a relatively low limit of liability for theft, roughly $1,500. That means, if your valuable item costs more than the limit of liability, an insurer won’t pay more than the amount specified in the policy.
If you want to insure your collectibles and valuable items securely, invest in property endorsements. You can choose many options, such as jewelry rider, art and antique rider, and silverware, furs, and rugs rider. These riders can raise the limit of the liability or the amount your insurer will reimburse you if your valuable item is stolen or damaged.
Another way is to invest in a personal property floater. If a rider increases coverage, a floater extends coverage to specific items. For example, it covers a wedding ring dropped in a kitchen sink drain or a luxury watch left in a hotel. While it can be costlier, it offers the broadest protection for any valuable item that standard home policies usually don’t cover.
Building Code Coverage
What are building codes? They’re the minimum requirements mainly created and maintained by the International Code Council (ICC) that every residential and commercial building should meet. They’re necessary to protect every building occupant’s health and safety sufficiently.
These codes comply with mechanical, electrical, plumbing, drainage, heating, air, and ventilation standards. They also involve structural support, roofing, foundation, and grading. For some countries that pay regard for specific disabilities, these codes also fall in with disability-related regulations.
ICC periodically enacts new codes, but you’re not necessarily required to make upgrades every time a new code is laid down. However, in the event of disasters and a total loss, your home needs to follow code-compliant upgrades.
The repair costs won’t be an issue if you have a home insurance policy. The thing is, a standard home policy only pays to restore your property to its original state. It doesn’t cover the additional costs to meet new code-compliant upgrades. In other words, there’s a chance that homeowners will be underinsured.
If your local government requires home repairs to meet the latest building codes, you may want to consider investing in building code coverage, especially if you live in older houses. It covers the additional costs of code-compliant upgrades in your house if a covered peril damages it. Otherwise, you’ll likely be stuck paying them out of pocket.
Business Property Coverage
If you’re running a home-based business or keep your valuable items needed for business inside your house, consider investing in a business property coverage rider to your policy. This endorsement covers any home business properties, such as inventory, supplies, or computers.
Depending on your needs and business’ nature, you may have a few various options for protecting your business property.
It’s best to have check-ins with your agents every year, so they can help you to figure out coverage gaps that may exist or are already existing on your current homeowners insurance policy. Lastly, remember that whether or not you need a home insurance rider depends not only on your budget but also on your risk tolerance.