Home Insurance Riders. Which Ones Do You Need?

Standard home insurance policies cover many types of losses. However, a home insurance rider also called an "endorsement" or "floater") may be required to cover certain things that are limited or excluded by the policy.

Conditions that Require a Home Insurance Rider:

Personal Property: The personal property coverage under a standard home insurance policy is full of limitations. For example, some types of personal property are covered, but only up to a specific amount and that amount may be only a fraction of the actual value i.e., jewelry, firearms, collectibles, money, etc.). Additional coverage for the full value of such property may require a home insurance rider.

Electronic Equipment: Coverage for computer equipment and data is often limited by standard homeowners insurance. You may need to purchase a home insurance rider for additional coverage.

Home Business: More than 20 percent of American households double as a business headquarters. Standard homeowners insurance is very limited on coverage for property used in business operations. Most policies are more restrictive toward business-related liability i.e., a customer is injured while in your home), often excluding such claims altogether. If you operate any form of business out of your home, consider adding a business-based home insurance rider to your policy.

Secondary Residence or Income Property: If you own another home that is used as a secondary residence or rental property, you may be able to obtain coverage for that property by adding a rider to your current homeowners insurance policy. If available, this method may be cost effective versus separate policies for each property.

Sewer and Drain Back-Up: A backed up sewer or drain can cause significant damage to your home. This type of loss may be excluded under your homeowners insurance. If so, a home insurance rider may be necessary to add this coverage.

Theft: Coverage under your insurance policy may be limited for theft of personal property. A home insurance rider may be available to increase coverage for loss caused by theft.

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