Homeowners insurance policy endorsements

A homeowners insurance policy protects your home and personal property from lots of different types of damage, like fire, lightning, theft, and vandalism. But there are some things your insurance won’t cover — like water damage caused by a plumbing backup or protection for your home business. 

Fortunately, most major insurers offer optional coverage add-ons, called endorsements, that can supplement the coverage in your policy to fully protect your home and belongings.

What is a homeowners insurance policy endorsement?

A homeowners insurance endorsement is additional coverage you can add to your home policy to cover perils and causes of loss that aren’t normally covered. Endorsements can also increase your coverage limits for expensive items like jewelry, electronics, and fine art — which standard home insurance only offers limited coverage for.

An endorsement may raise your premiums, however the protection it offers may be worth the slight increase in costs. 

13 common homeowners insurance policy endorsements

There are several homeowners insurance endorsements to choose from. Below are some of the most popular policy add-ons:

1. Water backup coverage

If water backs up through a sewer or overflows through a sump pump and damages your home’s foundation or your personal belongings, home insurance won’t reimburse you for repairs or new items. Water backup coverage supplements that gap in coverage.

How it works

Water backup coverage protects your home and personal property from water damage caused by backed up drains, sewage systems, and sump pumps, even if the discharge occurred due to mechanical issues. 

How much it costs

You can usually add between $5,000 to $25,000 in water backup protection to your policy for about an additional $30 to $70 a year. To decide on a coverage amount that works for you, consider how much it would cost to replace your flooring, furniture, and personal belongings if they were damaged by a sewer or drain backup.

2. Equipment breakdown coverage

Home insurance covers your appliances if they’re damaged by a covered peril, like a fire. But it won’t pay to repair or replace them if they break due to mechanical or electrical failure — but equipment breakdown coverage does. 

How it works

With equipment breakdown coverage, a variety of appliances and devices in your home are covered in the event that they break down due to mechanical or electrical failure, including:

• Boilers and furnaces

• Computers and related equipment

• Heating and air conditioning systems

• Home entertainment systems

• Home security systems

• Washers and dryers

• Refrigerators and freezers

• Ovens and microwaves

• Water heaters

Equipment breakdown coverage may also cover food spoilage if your freezer or refrigerator stop working and you're out all of that food.

How much it costs

Equipment breakdown coverage can cost about $25 to $50 annually for around $50,000 in coverage per occurrence. In most cases, you need to pay a deductible of $250 to $500 before your coverage kicks in.

3. Extended replacement cost coverage

Your homeowners insurance dwelling coverage is based on your home’s replacement cost value, which is how much it’d cost to rebuild your home from the ground up with similar build materials. You can extend these coverage limits with an extended replacement cost endorsement. 

How it works

By upgrading your policy with extended replacement cost, your insurer will pay for your home to be rebuilt and restored to its condition before the damage, even if the damage amount is higher than your dwelling coverage limit. Depending on how much coverage you get, you could be insured for anywhere from 125% to 150% of your home’s rebuild cost

How much it costs

Most major home insurance companies offer extended replacement cost coverage for an additional $25 to $50 a year.

4. Service line coverage

Standard homeowners insurance will generally repair damage to your home caused by ruptured utility lines beneath your property, but it won’t cover repairs to the service lines themselves. You can add service line coverage to your policy to enhance coverage for your service lines. 

How it works

With service line coverage, you can get reimbursed for backed up or punctured utility lines, including:

• Cable lines

• Drain pipes

• Fiber optics

• Internet lines

• Natural gas pipes

• Power lines

• Sewer pipes

• Sprinkler pipes

• Steam pipes

• Water pipes

You’re also insured against damage to your services lines that isn’t covered in a standard policy, including:

• Mechanical or electrical breakdown

• Mold, fungus, or wet rot

• Regular wear and tear

• Tree or root-caused damage

• Smog, rust, or other corrosion

• Vermin, insects, or rodent damage

How much it costs

Service line coverage generally costs about $30 annually for $10,000 in coverage, but depending on your insurance provider you may have the option of setting higher coverage limits.

5. Scheduled personal property coverage

Certain types of personal property, like jewelry, silverware, and electronics may be subject to sublimits, meaning you won’t be insured past a certain coverage amount — usually a $1,000 to $2,500 blanket limit for each category. To extend that coverage limit, you can purchase a scheduled personal property endorsement. 

How it works

A scheduled personal property endorsement can raise your payout limits for expensive property. Scheduled personal property coverage also stretches your policy protection to cover misplaced items.

Property types insured by scheduled personal property coverage include:

• Electronics

• Expensive antiques

• Fine art

• Firearms

• Furs

• Jewelry

• Musical instruments

• Silver and goldware

• Tech devices (cameras, computer systems, etc.)

How much it costs

Covered property types and coverage limits vary from company to company. Costs will also depend on if you're insuring multiple items — like a collection of watches — versus just one item. Generally, you can expect to pay around $100 for each $10,000 in scheduled coverage for a class of items.

6. Identity theft coverage

Some insurers automatically include identity theft coverage in standard policies, but if they don’t you may be able to add identity theft coverage as an endorsement. It covers the costs associated with identity theft recovery. 

How it works

Identity theft coverage helps pay for costs associated with recovering your identity, but it doesn’t include monetary reimbursement, like if someone drains your bank account. Policies vary by insurer and state, but you’re usually covered for fraud services, ID replacement, identity restoration, loss of income, and attorney and administrative fees. You can choose to enhance your identity protection with cyber attack coverage, cyber extortion coverage, or fraud coverage.

How much it costs

It’ll depend on the insurance company, but you may be able to add $15,000 in identity theft coverage to your policy for an additional $25 to $60 a year. 

7. Home business coverage

The maximum payout for home business property is typically $2,500 in a standard homeowners insurance policy. If you have laptops, cameras, and other tech devices you use for work, that $2,500 may not be enough coverage to fully replace everything you lost if your home office was damaged or broken into.

How it works

Home business coverage can extend financial protection to your business property and raise your coverage limits. This endorsement does not include liability coverage. 

How much it costs

Cost will depend on the size of your business and your insurance company. Generally, a home business endorsement costs an additional $25 annually to increase your coverage limits to $5,000. If you have a larger home business, you may need an in-home business policy, which is a separate policy that you can buy — they typically offer up to $10,000 in coverage. 

8. Dwelling under construction coverage

If your house is under construction or vacant for more than 60 days, standard homeowners insurance typically won’t cover your home due to the increased risk of theft, vandalism, and storm-related damage. Your coverage generally won’t pick back up until the renovations are finished and the home is occupied.

How it works

A dwelling under construction endorsement covers theft and damage to building materials while your home is under construction. You can also consider other supplemental coverage options like vacant homeowners insurance and builder’s risk insurance if you’re planning on living elsewhere while your home is being worked on.

How much it costs

Costs will depend greatly on the scope of the project. You can expect to pay more in premiums once the project is done, since any additions or upgrades you made will increase your home’s rebuild value.

9. Sinkhole coverage

Home insurance does not cover sinkholes or any other form of earth movement, like a mudslide. But your insurer may offer a sinkhole coverage endorsement. 

How it works

In certain states where sinkholes are more common — like Florida and Tennessee — insurers may be required by law to offer sinkhole coverage. Sinkhole coverage helps pay to repair your home, its foundation, and it covers the cost of stabilizing the ground if your home begins to collapse into a sinkhole. 

How much it costs

Sinkhole damage can be catastrophic, and coverage costs vary by state and insurance company. If you need more protection, you may be able to purchase a standalone sinkhole insurance policy. 

→ Learn more about sinkhole coverage

10.  Windstorm coverage

Wind and hail damage are covered perils in a standard homeowners insurance policy, but if you live in an area that is at high risk for hurricanes or other kinds of windstorms, wind and hail damage may be excluded from your policy.

How it works

If you live in an area that is prone to frequent severe storms — like the East Coast — wind damage may be excluded from your insurance. If that’s the case, your insurer may offer wind coverage as an endorsement. If they don’t, you can purchase separate windstorm insurance.

How much it costs

Like sinkhole coverage, costs vary according to coverage amounts. It'll also depend on your home's build materials, age, and location 

→ Learn more about windstorm insurance

11. Earthquake coverage

Earthquake damage is an excluded peril in a homeowners insurance policy. 

How it works

Some insurance companies offer earthquake endorsements. The endorsement essentially adds earthquake coverage from your policy — so it covers the costs of rebuilding your home, replacing your belongings, and paying for additional living expenses in the event an earthquake destroys your residence. You can also purchase standalone earthquake insurance.  

What it costs

The cost of an earthquake insurance will depend on your home’s location and the extent of coverage you need. Earthquake endorsements are significantly cheaper than a separate earthquake insurance policy. 

→ Learn more about earthquake insurance

12. Loss assessment coverage

Loss assessment coverage is a home insurance add-on that covers your portion of damage to common areas you're responsible for if you live in a shared community — like a condominium building or a neighborhood with a homeowners association (HOA).

How it works

Most damage to shared spaces like your community clubhouse or pool area is covered by your HOA's master policy, which is paid for by membership dues. If this shared space gets damaged or a guest has an accident, your community's HOA insurance will cover the loss up to its coverage limits. The remaining bill is split equally among the homeowners in the community.

That's where loss assessment coverage comes in. It's designed to cover these leftover costs so you don't have to pay for your share out of your own pocket.

What it costs

A loss assessment coverage endorsement usually costs anywhere from $25 to $50 a year on top of your standard home insurance policy premiums.

→ Learn more about loss assessment coverage

13. Ordinance or law coverage

Ordinance or law coverage is a home insurance add-on that covers the extra cost of getting your home up to code after a covered loss, including home construction, demolition, remodeling, and renovations.

How it works

Most city, state, or county governments have building codes around how homes must be built to ensure everybody's safety. Because building codes change frequently as construction techniques improve, it's likely your home isn't up to current building codes.

That's where ordinance or law coverage comes in. If your home is damaged in a covered incident, this endorsement will cover the extra costs to bring your home up to code while making other repairs.

What it costs

Most home insurance companies offer a limited amount of ordinance or law coverage that comes standard with your home insurance policy. But you can often purchase higher coverage limits for an additional fee. How much it costs will vary depending on where you live, your insurer, and how much additional coverage you purchase.

→ Learn more about ordinance or law coverage