Home Insurance Articles
What Is An Endorsement On A Home Insurance Policy
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Standard home insurance is set up as a blanket coverage; therefore, it is formulated to cover the average household. There is no point in a standard policy providing coverage on items that most families don't own. A home insurance endorsement is a rider created to allow the buyer of the policy to tailor his insurance coverage to his unique situation. Endorsements also allow homeowners to make adjustments or changes to their existing policies as their needs change over time without having the entire policy rewritten. Usually these changes add coverage, but endorsements also can delete coverage from a policy if it is deemed unnecessary. Any change in coverage will mean a change in premium cost. If a buyer adds coverage, the premium will need to be increased to cover the additional protection.
Most insurance agents will not tour a house with the homeowner to assess whether an endorsement needs to be added to the policy. It is incumbent upon the homeowner to understand the coverage provided by the insurance policy they are purchasing. They also must review the house and its contents to decide if endorsements are needed. Many people think of these riders when considering ownership of an unusual or costly item that blanket insurance would not cover. If a homeowner believes that he or she falls into this category, he should inventory his household goods. If necessary, the homeowner should obtain appraisals for the unusual or expensive items. An endorsement for those items can be agreed to once the insurance company agrees with the valuation. This is an example of a scheduled personal property endorsement, one of the most common forms of endorsements.
There are over 100 different types of endorsements available. Other common endorsements include personal injury, home business, earthquake, inflation guard, personal property replacement cost and theft coverage protection. The first several are relatively self-explanatory, but inflation guard and replacement cost need highlighting. The first automatically increases the home insurance to adjust for inflation and maintain adequate coverage. Replacement cost coverage increases the insurance so that the homeowner can recover his same standard of living after a loss. Standard insurance provides payouts based on the actual depreciated value of items lost, not on the replacement cost. Theft coverage protects personal items in the homeowner's car, truck or trailer.
Home insurance is a necessary aspect of home ownership. However, it is very important for an owner not to have a false sense of protection once they have purchased insurance. If the policy is not tailored to the buyer's specific needs, it will not provide them with the necessary coverage to get their life and home back on track in case of a loss. Using endorsements makes this possible.