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What is an Insurance Endorsement or Rider?

An insurance endorsement commonly referred to as an insurance rider or policy change is used to add, delete, exclude, or change insurance coverage. An endorsement can be made to an insurance policy when a person makes a new purchase such as when a person purchases a car or a boat, mid-term or at renewal time.

When an endorsement is made it will amend the original insurance policy in any of the 3 following ways:


-            Additional Coverage: An endorsement can add or include coverage that would otherwise be excluded. For example, a standard home insurance policy does not provide coverage for underground service line coverage. If your insurance company offers this optional coverage, you can add it to your policy which may result in an additional premium. Having this insurance endorsement will change your original home insurance policy to include underground service line coverage.

 

-            Exclusions: Some endorsements exclude coverage for certain types of claims. For example, a person owns a home and has a detached pole barn that is in poor condition. An insurance company may require an exclusion be added to the home insurance policy to exclude coverage for that building due to its condition. If there is a claim and the pole barn is damage, due to this structure exclusion there is no coverage for the pole barn.

-            Modification of coverage: An endorsement can expand the scope of existing coverage. For example, on an auto insurance policy a person has traded in their current vehicle and purchases a new vehicle. The vehicle that is being traded in will need to be removed and the new vehicle will need to be added onto the auto insurance policy which may result in a premium adjustment to your original insurance premium.


It is important to communicate any changes to your independent agent, so your insurance policy is revised accordingly less there be a claim and there is no insurance coverage or a gap in coverage. Also, it is a good recommendation to keep the new endorsement along with your original insurance policy. Don't forget to review all insurance endorsements that have been made to your insurance policy because changes to your insurance policy can have an impact on your insurance rates and to ensure your coverages and all items are insured accurately.

 

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