Homeowners insurance policy endorsements

A homeowners insurance endorsement is optional coverage you can add to your policy to protect parts of your home and property that are not covered by standard insurance.

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A standard homeowners insurance policy comes with six basic protections that cover your home, personal property, and liability in the event something bad happens. Insurance companies also offer additional insurance coverage, or endorsements, that can add to or modify the coverage in your policy.

Most insurance companies offer several endorsements to accommodate your supplemental coverage needs. Service line, equipment breakdown, and water backup coverage, for example, are valuable policy add-ons if you have an old home with older plumbing or built-in appliances.

Key Takeaways

  • A homeowners insurance endorsement is a change to your policy that adjusts or modifies your coverage

  • Endorsements broaden protection and provide higher coverage limits for your home and property

  • Some endorsements are required depending on the area you live in, while others make sense to add based on how old your house is or how you use your property

What is a homeowners insurance policy endorsement?

A homeowners insurance endorsement is additional coverage you can add to your policy to cover perils and causes of loss that aren’t normally covered by a standard HO-3 insurance policy. If you’re seeking coverage for perils that are not covered by your standard insurance, or higher coverage limits for jewelry, electronics, or fine art, you can add a home insurance endorsement to your policy.

A standard home insurance policy insures your home and personal property against several kinds of perils, including fire, lightning, theft, and vandalism.

But if you have a plumbing backup that causes water to overflow and damage your bathroom floor, for example, that wouldn’t be covered by the dwelling coverage in a standard policy. However, most insurers offer a policy endorsement called water backup coverage that may reimburse you for new flooring.

Common homeowners insurance policy endorsements

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

Water backup coverage

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

A standard homeowners insurance policy offers coverage for your home and detached structures, like your garage. But if water backs up through a sewer or overflows through a sump pump and damages your home’s foundation or your personal belongings, basic policy coverage won’t reimburse you for repairs or new items. Water backup coverage supplements that gap in coverage.

You can usually add between $5,000 and $25,000 in water backup protection to your policy, with the former costing you about $30-$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.

Equipment breakdown coverage

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:

  • Heating and air conditioning systems

  • Refrigerators and freezers

  • Washers and dryers

  • Ovens and microwaves

  • Boilers and furnaces

  • Water heaters

  • Computers and related equipment

  • Home entertainment systems

  • Home security systems

Most insurers will provide around $50,000 in coverage per occurrence. In most cases you need to pay a deductible of $250 to $500 for your coverage to kick in.

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Extended replacement cost

When you file a home damage claim after a covered loss, your insurer may reimburse you up to your personal liability coverage limit. 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.

Most major home insurance companies offer extended replacement cost for an additional $25 to $50 a year, and depending on how much coverage you get, you could be insured for anywhere from 125% to 150% of your home’s rebuild cost.

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

  • Sewer pipes

  • Water pipes

  • Drain pipes

  • Cable lines

  • Power lines

  • Internet lines

  • Natural gas pipes

  • Fiber optics

  • Steam pipes

  • Sprinkler pipes

With service line coverage, you’re insured against damage to your services lines that isn’t covered in a standard policy, including:

  • Regular wear and tear

  • Mechanical or electrical breakdown

  • Tree or root-caused damage

  • Vermin, insects, or rodent damage

  • Smog, rust, or other corrosion

  • Mold, fungus, or wet rot

Service line coverage is generally offered in amounts of $10,000 and $25,000, but depending on your insurance provider you may have the option of setting higher and lower coverage amounts.

Loss assessment coverage

If you live in a home or condo that belongs to a homeowners association (HOA), you and other members of your community will need to pay dues for maintaining and improving your shared spaces. Loss assessment coverage helps prevent condo owners from paying out-of-pocket expenses associated with the building’s shared spaces, services, and amenities.

Loss assessment coverage also covers liability assessments if a guest is injured in your home or a space belonging to the condo association. With loss assessment coverage, you may be covered from damage to common areas and master policy deductible assessments.

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–$2,500 blanket limit for each item category. With a scheduled personal property endorsement, you can raise your payout limits for each property type. Scheduled personal property coverage also stretches your policy protection to cover misplaced items.

Property types insured by scheduled personal property coverage include:

  • Jewelry

  • Silver and goldware

  • Electronics

  • Furs

  • Firearms

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

  • Musical instruments

  • Expensive antiques

  • Fine art

Covered property types and coverage limits vary from company to company.

Identity theft coverage

Many companies now provide identity theft coverage to cover the costs associated with identity theft recovery. Policies vary from insurer to insurer and state to state, but you’re generally covered for fraud services, ID replacement, identity restoration, loss of income, and attorney and administrative fees.

For additional security, you can choose to enhance your identity protection with cyber attack coverage, cyber extortion coverage, or fraud coverage.

Home business coverage

The maximum payout for a home business 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.

Home business coverage can extend financial protection to your business property and pay for expenses associated with injury if a client or employee is injured on your property.

Depending on your insurer, home business owners may also have the option to add in-home business insurance or a business owners policy to their standard insurance for more comprehensive property and liability protection.

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.

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.

Food spoilage coverage

Homeowners insurance may reimburse you for food spoilage if the loss was caused by a covered peril, like a power surge or electrical failure after a severe storm.

Most policies include a base coverage amount of $500 for refrigerated food spoilage, which in many cases is enough coverage. But many carriers also offer a food spoilage coverage endorsement if you’re interested in higher coverage limits for refrigerated food.

Ordinance or law coverage

Ordinance or law coverage is a home insurance add-on that pays for your home to be repaired or rebuilt up to any new building codes after a covered claim. It can also cover changes to undamaged parts of your home.

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