It’s all in the Endorsement
What are endorsements- Endorsements are additional coverages offered by insurance companies to increase or supplement already existing coverage along with offering coverage for perils (Dangers) not covered by the basic homeowner policy.
These endorsements are typically overlooked by agents
We will discuss the 5 most essential endorsements:
- Water backup coverage: Water backs up into the home due to a sewer or overflowing sump pump.
Protection: This endorsement provides your home and personal property coverage from water damage caused by backed-up drains, sewage systems, and sump pump overflows.
Value: This is a key endorsement due to on average you chose the amount of $5k - $25k depending on the carrier some offer upwards of $100k or a percentage of the value of the home. An additional premium is minimal at $30-$125 per year.
** Note any damage to the sump pump or sewer drains is not covered by the homeowner policy.
2. Service Lines: This endorsement covers buried lines in your yard underground – your home policy will cover the home if damaged from underground wiring, pipes, and such but will not repair the lines themselves.
Protection: Service line coverage covers backed-up pipes or damaged cable, and utility lines here are some examples:
- Cable lines
- Water/Drain, Sewer Pipes
- Internet lines
- Fiber optic
- Power lines * These are the most common but not they do not cover septic tanks or fuel tanks
Value: The Premium for this endorsement ranges depending on the carrier and the amount of coverage taken- for example, $30 per year for $10k in coverage to repair the service line.
3. Extended Replacement Cost Coverage: This endorsement increases part A of your homeowner policy by either 25%, 50%, or 100% depending on the amount chosen by the client or carrier.
Protection: With the high cost of construction recently this coverage would cover an additional 25%, 50%, or 100& on top of the normal Coverage A coverage – Replacement cost of your home.
Value: This offers great value to the homeowner with possibly additional coverage of a $25 to $125 increase in premiums annually.
4. Personal Injury: This is when you are sued for libel or slander by another party. Some homeowner policies have this covered under personal liability. But most home carriers offer this as an endorsement
Protection: This endorsement protects anyone defined as insured on your home, condo, or renter’s policy. Yes, this includes minors if they are responsible for or appear to be responsible for any libel or slander suit.
Value: It covers any legal fees you may incur and payout on any damages that you are liable for. Normally up to your liability limit but check with the carrier first to confirm. Remember even if not found not guilty of the suit you may still be responsible for legal fees. Adding a great value for the cost. The cost of this endorsement is very minimal $10-$25 per year depending on the carrier.
5. Replacement cost on contents: This endorsement is the main one that every policy should have for either home, condo, or renters.
Protection: If an item is destroyed, stolen, and covered under the named peril, it will be replaced without depreciation.
Value: Let’s say your Mac book air was destroyed you purchased it 2 years ago -your insurance adjuster would tell you to go purchase a new mac book air with the same features and they will cut you a check less the deductible. There would be no depreciation taken which can be substantial with an insurance company. The premium for this coverage would be again very minimal.
Honorable Mention- Home business endorsement: Provides coverage for items related to your home business computers, if photography business cameras.
Protection: Items related to your home business. Typically only up to a set amount of $2500 but depends on the carrier.
Cons: It does not provide general liability coverage for your business. You would need a business owner policy (BOP) in order to cover liability and items related to your business. BOP policies cover you where ever you business takes you be it away from your home or in your home you are fully covered as outlined in your policy.
If you are in need of a policy review please click the link below:
Walter Greer is the Agent/Owner of G & G Insurance Agency, LLC
Licensed in MA, MS, TN, and GA