A rider is an add-on to a homeowners, renters, or condo insurance policy. Also referred to as an endorsement, amendment, or “scheduling an item,” a rider means you’re adding a specific item(s) to your policy. Riders typically cover, at an additional cost, an item that might not be already covered on your policy or is inadequately covered. This could include such items as an engagement ring, bicycle, or expensive piece of artwork. While less common, insurance riders are also available for life and auto policies.
How do insurance policy riders work?
First, you need to determine the item(s) you want to cover. Start by taking a home inventory of your valuables from time to time, even if you think your property is well covered. You may be surprised to find valuable belongings that are not covered or may have a sublimit, but could be covered with an insurance rider. If you don’t know the value of an item you’ll need to get it appraised. Once you know the value, you’ll need to notify your insurance company and start the process of adding the item to your policy.
Adding a rider often involves an appraisal or detailed description of the item(s) you want to cover. Coverage details and requirements vary by insurer. Adding, or “scheduling,” items will raise the cost of your policy, but it’s worthwhile because you’ll usually only pay a little extra to cover an item of much greater value.
What are the benefits of adding an insurance rider?
- Increased coverage: Most home insurance policies contain sublimits, which are essentially limits within limits. Let’s say you have a $100,000 limit in personal property coverage for your belongings, but your limit on jewelry is only $2,500. If you have a piece that’s worth $10,000 and you don’t add a rider for it, your insurance company won’t cover $7,500 on a claim for that item.
- Low or no deductibles: Your personal property coverage may have a high deductible. Riders, on the other hand, often have low deductibles or none at all. If you have a musical instrument worth $3,000 that gets stolen and your property deductible is $2,000, you’ll only receive $1,000 on an insurance claim for that item. If you had a rider with a deductible of $50, your insurance payout would be $2,950.
- Accidental loss coverage: Many basic insurance policies won’t protect you against loss by “mysterious disappearance.” That means if you accidentally lose your wedding ring at the gym, you may not be covered. However, with a rider, the ring will be covered even in this scenario.
- Increased savings: You can save money by not purchasing a separate policy to insure your jewelry, art, or valuables. The cost of adding coverage is typically based on a percentage of the base policy premium.
What items are commonly scheduled on a rider?
- Jewelry: Wedding and engagement rings, necklaces, watches, earrings, diamonds, and other precious stones are all items typically scheduled on a rider. You’ll need to add a separate rider for each individual piece.
- Personal collections: From fine art to coins and stamps, regardless of their value, a rider safeguards your collections and memorabilia.
- Specialty items: These include bicycles, cameras and projection equipment, musical instruments, firearms, and other notable possessions. Some exclusions may apply.
How much does it cost to add a policy rider?
The price varies based on the item, appraised value, and the insurance company. In general, riders are affordable. Jewelry can typically be scheduled for about $1.50 to $2 per $100 in value (or 1.5% to 2%). If you own a piece valued at $5,000, expect to pay around $75 to $100 for the rider.
Collectibles are less expensive to insure. For example, you can schedule a stamp collection for 80 cents for every $100 in value (or 0.8%). If your collection is worth $5,000, your rider will cost around $40.
This article is brought to you by our friends at Progressive Insurance. Miller’s would like to extend its gratitude to Progressive Insurance for being a wonderful business ally. To learn more about insurance riders from Progressive Insurance, please visit https://www.progressive.com/answers/insurance-rider/.
