A Guide to Understanding Insurance Endorsements, Riders and Exclusions

Have you ever opened your insurance renewal and read through all the pages? Maybe not, but you may have noticed that many of the pages show your endorsements or exclusions. Here’s what you should know about them.

What Is an Endorsement in Insurance?

Insurance endorsements are used on property and casualty insurance. You may have seen them on your home, auto and other personal policies. An insurance endorsement is an addition to the existing policy contract. Here’s what an endorsement can do:

• Add to the coverage of your insurance policy
• Limit or delete coverage of a policy
• Add or delete people and locations on your policy

Simply put, the purpose of an insurance endorsement is to make a policy change. Many insurance endorsements are offered as optional coverage you can add to your policy. If you are choosing to add a voluntary endorsement to your insurance policy, there may be a premium adjustment. Some endorsements can be added mid-term. Here are some examples of our common insurance endorsements or optional coverages:

Residential Equipment Breakdown

This coverage helps protect appliances, electronics, electrical systems and other equipment in your home.

Water Backup of Sewers or Drains

This coverage helps cover the cost to clean up and repair in case of a sump pump failure.

Auto Repair or Replacement Cost

If your car is less than four model years old and is totaled in an accident, this optional coverage can replace it with a similar new vehicle.

Emergency Roadside Assistance Coverage

Use our toll-free number to get assistance with battery jump starts, fuel delivery, flat tire service and lock-out service.

Livestock Freezing or Smothering

This coverage can help cover livestock for loss caused by freezing or smothering in blizzards or snowstorms.

What Is an Insurance Rider?

Riders are most often associated with life insurance policies and they allow the coverage to be tailored to the needs of the client. The most common life insurance riders include guaranteed insurability, accidental death, waiver of premium, accelerated death benefit for Terminal or Chronic Illness, children’s term, and return of premium riders. There are various insurance riders, and some may come with additional costs. Common ways to add coverage include:

Guaranteed Purchase Option

The guaranteed purchase option allows you to periodically purchase additional whole life insurance up to the amount stated in the policy without a medical exam. 

Waiver of Premium

With this rider, if you experience a total disability that continues for at least 90 consecutive days, premiums will be waived for the duration of your disability.

Daily Living Rider

Daily Living Rider accelerates a portion of your policy’s death benefit if you have been chronically ill for at least 90 days and are ill for another 90 days or longer. This rider option can help with needs resulting from chronic illness, but it’s not recommended that you cancel, reduce, surrender or replace a long-term care or health insurance policy for this rider. 

Living Benefit Rider

If you are diagnosed with a qualifying terminal illness, you can receive money by using a portion of the policy’s death benefit. This feature is provided at no additional cost. The Living Benefit rider is also known as the Accelerated Benefit rider in some states. 

What Are Insurance Exclusions?

Exclusions eliminate coverage for some type of risk. Here are some reasons coverages may be excluded: 

• Catastrophic. War is a common exclusion as it will likely affect a huge number of people. Damage caused by war would not be covered.
• Covered elsewhere. If a cause of loss is covered by another type of policy, the insurance company will avoid double coverage.
• Easy to control. If the damage could be easily prevented by an insured, that may be excluded. A common example would be excluding damage to personal property caused by rain, snow, ice or sleet after being left out in the open. 
• Not accidental. Most policies will not cover damage caused on purpose.
• Wear and tear. The natural and gradual deterioration of property overtime is not covered.
  
  

Are You Covered?

It is important to review your policy and ask your agent any questions you have about coverage. It can be hard to know exactly the type of coverage you need or want so just be upfront with your agent about your concerns. Schedule a SuperCheck with your Farm Bureau agent to make sure you are properly covered.