Obtaining adequate insurance for your home is a vital part of being a homeowner, especially if you reside in the hurricane-prone state of Florida. But if you do hold a standard home insurance policy, you may be surprised to learn that it’s not enough.
That’s why many carriers offer endorsements, which are amendments to an existing insurance contract. An endorsement can be used to alter your coverages. For example, it can add or increase coverage, but it can also exclude or decrease.
They are intended to tailor a policy to your individual needs. But like everything else in insurance, endorsements are not always easy to understand. They also vary from insurance provider to insurance provider and can have multiple definitions. Here are the most common types of endorsements offered by insurers.
Which endorsements increase my coverage?
Golf Cart Coverage
This type of endorsement increases your premium to add protection for your golf cart. For example, an endorsement can provide golf cart personal property coverage of up to $5,000 and liability coverage of up to $25,000. In other words, you can claim up to $5,000 if your golf cart is stolen or damaged. You can also claim up to $25,000 should someone get hurt on your golf cart and file a lawsuit against you.
Identity Theft Coverage
This endorsement increases your premium to add financial protection in the event of identity fraud, some companies provide it in their standard policy with no up-charge. For example, an endorsement may provide up to $25,000 to pay for any expenses incurred as a direct result of any single identity theft or fraud. The fraud must be first discovered during the policy period, and not before.
Loss Assessment
This type of endorsement is standard with a basic policy and can be increased, which would increase your premium to add an extra layer of protection. In the event that you are responsible for a certain kind of covered loss, and that loss exceeds the stated coverage limit, this endorsement would kick in. For example, if you are responsible for damage to your roof, and the price to repair the damage exceeds the limit in your policy, this loss assessment endorsement would help cover the amount exceeded.
Mold Property
This endorsement increases your premium to add more protection in the event of mold damage. It increases your coverage limit to pay for loss to covered personal property that is damaged by fungi, wet or dry rot, yeast or bacteria in the home. Most standard home insurance policies offer mold coverage, but if you find your limit is not enough, this endorsement might come in handy.
Mold Liability
This endorsement is standard with a basic policy and can be increased. It will provide coverage to a third party for a claim you become legally liable for any mold growing in your home. This insurance will pay for bodily injury and/or property damage to an outside party that becomes your responsibility.
Scheduled Personal Property
Most standard home insurance policies offer protection for your personal property, but it tends to exclude items that are very valuable or out of the ordinary. If you know you’ve got a few items that need protection, adding this endorsement might be necessary so that your item’s value is covered in the event of a claim.
Screened Enclosure, Carport, and Awning
This endorsement increases your premium to provide coverage for screened enclosures, aluminum-framed carports, and awnings. Most standard policies do not already include this type of coverage. But considering they are very susceptible to wind damage, it may be a good idea to add some coverage.
Sinkhole Loss Coverage
This endorsement increases your premium to add protection in the event of a sinkhole. It commonly has a deductible and provides coverage for direct physical loss to the home caused by a sinkhole. Many standard homeowners insurance policies cover sinkholes, but only in relation to minor issues. It is common knowledge that Florida is prone to large sinkholes, which can destroy homes completely. This is why adding this endorsement is a good idea if you live in an area where the risk of sinkhole damage is high.
Water Back-up and Sump Overflow
Because this type of water damage is so common, it’s typically not included in a standard homeowners insurance policy. So, this endorsement would add this coverage a premium increase. For example, an endorsement may provide up to $5,000 for direct physical loss caused by water that backed up through drains or that overflowed from a sump.
Animal Liability
For a premium increase, this endorsement offers more coverage for your pets. For example, an endorsement might provide a $25,000 liability sub-limit and medical payments of $2,000. In other words, you might be able to claim up to $25,000 in the event that your pet injures another person and they file a lawsuit. You may also be able to claim up to $2,000 to help pay for their medical expenses.
Limited Dog Liability
Similar to the previous endorsement, this one focuses on your dog. For a premium increase, this endorsement provides a $25,000 liability sub-limit and medical payments of $2,000. In other words, you might be able to claim up to $25,000 in the event that your dog injures another person and they file a lawsuit.
Credit Card, Fund Transfer Card, Forgery and Counterfeit Money
For an additional premium, this endorsement increases the limit of liability under ‘Additional Coverage’ for credit cards, fund transfer card, forgery, and counterfeit money.
Many standard policies already offer some for this. For example, if someone takes and uses an insured’s ATM card without permission, the insured can claim up to a certain amount. But this amount is typically low. That’s why this endorsement is offered to increase the limit.
Earthquake
While a standard policy may cover losses from fire following an earthquake, it does not typically cover earthquake damage, specifically. This endorsement would add this coverage for a premium increase.
For example, an endorsement may provide coverage for direct physical loss to the property caused by an earthquake, including land shock waves or tremors before, during or after a volcanic eruption.
Equipment Breakdown Coverage
If you’ve got expensive equipment that needs protection, you might be able to add them to your homeowners insurance policy. This endorsement does just that for a premium increase. For example, an endorsement might provide coverage for loss due to mechanical or electrical breakdown of nearly any type of equipment. This coverage may apply to the cost to repair or replace the equipment and any other property damaged by the equipment breakdown.
Flood Endorsement Coverage
Many homeowners know that standard policies do not include flood coverage. However, some allow you to add this coverage through an endorsement that increases your premium. For example, an endorsement might provide coverage for direct physical loss to the home caused by a flood.
Home Computer Coverage
For a premium increase, this type of endorsement provides coverage for your home computers and related equipment. For example, it may cover physical loss due to damage. However, this damage may be subject to certain exclusions.
Increased Amount of Dwelling Coverage
The dwelling coverage is one of the most important parts of a homeowners insurance policy. But often times we find that the amount received in a claim is not enough in real life. That’s where this endorsement comes in. For instance, the carrier might pay up to a specified percentage over an insured's policy limit in order to fully replace a home damaged by a covered loss. This percentage is often shown as 120 to 125 percent of the stated limit of coverage.
Increased Law and Ordinance
Laws change frequently. And while you may think your home is compliant for now, this may not be the case in a few years’ time. New laws can make it mandatory that you make certain changes to your home, which is why carriers offer an endorsement that increases your law and ordinance coverage.
For a premium increase, this endorsement provides more coverage for the enforcement of any ordinance or law regulating the construction, repair or demolition of your dwelling. The coverage would usually be a percentage of your dwelling amount, and the endorsement would increase that percentage.
Increased Special Limits of Liability
A special limit of liability in an insurance policy is the maximum that the insurer will pay for certain predefined items in a claim. This is different from the contents and personal property limit on your insurance declaration page. Often times, the special limit of liability is low when it comes to very valuable items.
That’s why many homeowners choose to add this endorsement. It basically increases the Special Limits of Liability under Coverage C – Personal Property. Some of the covered items may include money, gold, securities, jewelry, silverware, firearms, and certain electronic devices.
Jewel and Furs Increased Special Limits
Similar to the previous endorsement, this one also increases your special limits but only for particular items. This endorsement lifts the premium to add more coverage for jewelry and furs. For example, a typical limit to a claim for the loss of an individual piece could be $2,000, with the overall limit at $5,000. This endorsement increases your Coverage C limit depending on the amount you select.
Other Structures Rented to Others - Residence Premises
For an additional premium, this endorsement covers the structures on your property that are rented to other people. The structure must be on the residence premises and held for rental to any person who is not a tenant of the dwelling or uses the property as a private residence. This may include a tool shed or garage.
While ‘other structures’ are included in a standard homeowners insurance policy, there are some insurers who exclude coverage if the structure is rented out. This endorsement is meant to close that gap for an additional premium.
Package Upgrade
A package upgrade endorsement increases certain coverages in a standard policy and adds protective endorsements. These are bundled together by the carrier to provide you a more superior, upgraded coverage that fits your needs at a discounted rate. Sometimes standard is not enough. This endorsement is meant to ensure all of your risks are minimized.
Permitted Incidental Occupancy
Most standard policies assume no business is conducted in the home. But if you do work at home and would like to insure it, this endorsement might be handy.
For a premium increase, this endorsement provides coverage for certain businesses conducted by an insured on the property. Examples of such occupancies include offices, schools or studios.
Personal Injury Coverage
A personal injury endorsement adds liability protection to your homeowner’s insurance policy. For a premium increase, this endorsement provides liability coverage in the event you caused personal injury to others. Injuries can include false arrest, imprisonment, libel, slander, defamation of character, invasion of privacy, and wrongful eviction or wrongful entry.
Personal Property at Other Residences
Most standard homeowners insurance policies offer to cover your personal property no matter where it is in the world. However, there are restrictions to this, and that is if the property is located at an insured’s other residence.
To fill that gap, this endorsement was created. For an additional premium, the endorsement provides coverage for personal property usually located at an insured’s other residence, such as second homes or college dorm rooms.
Personal Property Replacement Cost Coverage
A standard policy may cover your personal property, but only to a certain limit. It may also replace your property at Actual Cash Value. This endorsement would increase your premium so that you could fully replace your personal property if it is damaged or destroyed by a covered loss.
Refrigerated Personal Property
Floridians know that when a hurricane pays a visit, the power goes with it. Loss of power means the complete or partial interruption of electric power due to conditions beyond an insured’s control. This endorsement protects your refrigerated personal property for a premium increase.
For example, the endorsement may provide coverage of up to $500 for refrigerated property in the event that it gets damaged.
Silverware Increased Limits
A standard policy would typically limit the amount you can claim from certain valuable items. But if you’re interested in protecting just your silverware, this endorsement might be right for you.
For a premium increase, this endorsement protects your valuable silverware. It provides coverage for silverware up to the selected coverage limit.
Special Personal Property Coverage
Standard homeowners insurance policies typically cover your personal property, but only up to certain limits and from specified causes of loss. This is also known as specified perils.
However, if you’d like to protect your items from all types of risks, then this endorsement is the one to get. For an additional premium, this endorsement offers coverage for your personal property for all risk. Adding this endorsement can help protect your belongings in situations that are not listed as covered perils in your policy.
Which endorsements lower my premium?
Limited Water Damage
Water damage is one of the most common types of claims, which is why your premium may be high. If you’re interested in lowering in your premium, you can opt for a limited water damage endorsement. For example, the endorsement may limit your water damage coverage and provide you with up to $10,000 for water damage.
It’s important to note that water damage can be extremely expensive to repair. Unless you know you would be able to bear the cost in such an event, it is usually recommended to hold onto adequate water damage coverage.
Actual Cash Value for Roof
Some insurance companies have begun offering to cover roofs for Actual Cash Value (ACV) rather than Replacement Cost Value (RCV). If your policy is for ACV, your insurance company will pay the actual cash value of your roof at the time of a covered loss. This means the actual cash value minus your deductible amount minus the depreciation cost according to the age of your roof. If your policy is for RCV, your insurance company will pay the replacement cost value of your roof at the time of a covered loss. This means the replacement cost value minus your deductible.
This is why if you opt for ACV, you can earn yourself a premium discount. This done by adding the ACV for Roof endorsement. However, depending on the age of your roof, it is usually not recommended to opt for ACV, as you might find yourself paying more out of pocket to repair your roof in the event of damage.
Exclude Personal Property Coverage
Another way to reduce your premium would be to exclude your personal property coverage. For a premium discount, this endorsement would exclude Coverage C: Personal property. This means you would only have coverage for the dwelling, and not the contents or any personal belongings.
This endorsement might make sense if you’re insuring a home you don’t reside in. For example, if you rent your home to others, you may only be interested in insuring the physical building of the home, and not its contents.
