Homeowners insurance is something every homeowner must have. Although most homeowner’s policies cover a wide breadth of issues, they are not completely comprehensive. Many insurance companies offer riders for homeowners who wish to fill the gaps that are left by their homeowner’s policies. Riders are usually inexpensive, and the peace of mind they provide can be well worth the additional cost. If you are wondering if purchasing a rider is worth it, the following are five reasons to get a homeowner’s rider.
1. Sublimits
Riders are often necessary for a homeowner’s policy because of the sublimits that can be present. Sublimits are common for items such as jewelry. The total amount of coverage for all jewelry might be an amount that is less than the actual monetary value of the pieces. This occurrence is common if the policyholder owns one or more pieces of valuable jewelry. Since the insurance policy itself is not enough to cover the price of the item if it is lost or stolen, a homeowner needs to cover the additional worth of the items.
2. Accidental loss
Most homeowners insurance policies do not cover the homeowner in instances of accidental loss. For example, if a woman were to drop her wedding ring down the kitchen sink, it would not be covered by the homeowners insurance policy. However, if she had a rider on the ring, it would be covered.
3. Inadequate homeowner’s policy
Too often, homeowners purchase inadequate homeowners insurance. They purchase bare- bones coverage that offers just a minimal amount of protection. Then, if the need to make a claim arises, there is not enough coverage to cover everything that needs to be repaired or replaced, and the homeowner needs to find a way to make up for the shortfall. A rider can help alleviate this issue. If your home is a total loss, a rider on your homeowners insurance policy can cover what the original policy does not.
4. Riders help when deductibles are high
Many homeowners choose to have a higher deductible on their homeowners insurance policy as a way to save money. Riders have lower deductibles, so they are perfect for special items in the home that need to have insurance coverage. If something happens to an item that is covered by a rider, it can be covered without affecting the original deductible.
5. Specific instances
There are some specific instances where, according to Daily Finance, having a rider on a homeowners insurance policy is beneficial. These include personal property that is expensive should be protected with a rider in case the homeowners insurance policy provides insufficient coverage. Another instance is sewage backup. Massive floods have become commonplace. Unfortunately, when Mother Nature is bringing her worst, people’s homes suffer. The damage that is a direct result of a flood must be covered by a completely separate insurance policy. However, if the sewer backs up, the only way the damage that is caused can be covered is if there is a rider in place. Sewage backup riders cover physical damage from the backup as well as sump pump failure. It also provides coverage if tree roots block the sewer line. This rider costs a minimal amount of money but provides invaluable peace of mind.
Building code upgrades is an important addition. In the unfortunate event that your home is destroyed, it will need to be rebuilt to current codes, as the codes from the original build cannot be grandfathered to the new construction. The cost of upgrading to updated codes is not covered under a regular homeowner’s policy. However, a rider for code upgrades can save a homeowner thousands of dollars in rebuilding costs. Consider adding replacement costs (contents). A rider of this nature does not take into account depreciation value for any personal property that needs to be replaced. Many items depreciate in value over time, despite the intrinsic value it may hold for the owner. It is comforting for a homeowner to know that items can be replaced in their entirety and a replacement will not be of lesser quality or value.
Finally, remember to ask about guaranteed replacement cost. This rider is helpful if the homeowner needs to have an entire house replaced. The rider replaces the first home with a new one of similar kind and quality, even if the cost of the new home is higher than the value is listed on the original policy. Often, there is a limit of 25% above the listed value of the original home.
Homeowner’s riders are great tools to use to make your homeowners insurance policy more comprehensive. If you are in need of homeowners insurance or want to know more about adding a rider contact an experienced local insurance agent to help guide you through the process.
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