Having homeowners insurance protects your home from a host of risks and perils. Theft, burst pipes, fallen trees, all covered by your basic homeowners policy. But what happens when something occurs outside of your policy’s listed perils? If something unexpected happens and your basic homeowners insurance policy won’t help repair your home, a rider will come in handy.
What exactly is a rider? A rider is an added coverage option homeowners can add to their policy to extend their coverage. A rider is not quite a separate policy but an addition to your existing one. This means you won’t have to pay the extra policy costs. Riders can be relatively cheap as they aren’t underwriting too much. Adding a rider can be just as necessary as having your basic homeowners policy.
Different types of insurance provide different types of riders. For example, life insurance will offer riders that help cover you during terminal illnesses. Homeowners insurance will supply riders that protect from unnamed risks like earthquakes and floods. Knowing which rider fits your own situation best can save you from financial ruin. If you’re not in an earthquake-prone area there’s no reason for you to purchase earthquake insurance.
What to cover with a rider
With homeowners insurance, you’re covered for not only your home, but all belongings within. Up to certain limits. Most items are covered by your basic insurance policy from theft, named perils, and a specified price limit. If something happens that is not covered by your policy or if the item is more expensive than your insurance will cover, you’ll need a rider.
By adding a rider to protect an expensive item, you are insuring that item for its full cost. To get this process started, your item will need to be appraised. The price that the appraiser gives you is the amount that item will be covered for by your rider. What items are typically covered by riders?
Jewelry
Jewelry is the most common item covered by riders. Some rings and diamonds can be rather costly and some homeowners insurance policies have low limits. Often times you’ll find that a family ring exceeds the insurance limits leaving it susceptible to loss. Taking out a rider on the ring or other types of jewelry will help prevent this loss.
Art and Sculptures
Paintings and sculptures are expensive and, in most cases, insurance companies don’t want to cover the cost to replace them. Same can be said for antiques and furniture. Hard to replace and often exceeding the insurance limits.
Antiques And Collections
Whether it be coins, stamps, or baseball cards, collections can be rather expensive. Taking out a rider on your antique and/or collection will help to cover them entirely in the event of loss.
Instruments
Homeowners insurance policies typically cover instruments that are used for recreation. However, the insurance limits still apply, and professional musicians might find themselves uninsured. Taking out a rider can help protect your instrument from all disasters.
Wedding gifts
Memories and gifts are invaluable. Unfortunately, they’re only invaluable to you. Insurance companies oftentimes exclude wedding gifts and wedding dresses from your policy as they can be pretty pricey.
There’re many different items that can be covered by your insurance riders. Knowing what you have that is not covered by your homeowners insurance policy is important. Finding the perfect riders to cover your belongings is even more so. Speak with your agent today to find out what your options are to cover your personal items.
Costs and how to decrease them
Homeowners insurance riders are relatively inexpensive and affordable. Your typical jewelry rider costs about $5-$10 for $100 worth of coverage. This means that a watch that costs $5,000 can be completely protected for about $50 with the right riders.
Reducing costs of insurance riders can be the same process of reducing risk to your home. Adding smoke detectors, security systems, and CO2 monitors will help prevent more damage to your home and your belongings. Keep record of your item’s appraisals as when your belongings are damaged, the insurance company will want proof of the appraised value.
While having a higher deductible may decrease the overall insurance premium, riders won’t require as much set aside. Each rider has a deductible of its own, but they are low costs and still provide the same overall coverage. Adding a higher deductible may decrease your rider’s premium but not by much.
Covering your belongings can be difficult and purchasing a separate policy can be expensive. By adding a rider to your insurance policy, you allow your expensive items to be covered for their full value. Don’t let a disaster destroy your collection or your artwork forever, purchase a rider and be better protected from the unexpected. Speak with your insurance agent today to find out what options best suit you!
