When searching for the perfect homeowner’s insurance for you, may end up asking yourself, “What is a rider? Should I get one? Should I get multiple?” The easiest way to begin answering those questions is by defining what a rider is, how it can benefit you and offer you some examples.
What is a rider?
A rider is an add-on to an insurance policy. Riders will give you additional benefits at an additional cost. Generally speaking, NJ homeowners insurance riders help policyholders create insurance products that meet their unique needs. Many insurance plans, especially homeowner’s insurance plans, just cover the basics. These basics, on average, are as follows:
Dwelling – This covers insured damages to your home like plumbing, wiring and permanently installed heating and cooling systems.
Other Structures – This coverage provides protection for unattached structures like sheds.
Personal Property – This coverage offers protection for the contents of your home and its items belonging to those residing with you.
Loss of Use – If a peril, such as a fire, displaces you from your home, this coverage provides assistance for living costs beyond your normal costs.
Personal Liability – This coverage provides protection if you or a family member residing in your household is legally responsible for injuries sustained by someone who visits your home.
Medical Payments to Others – This coverage provides limited amounts for payment of medical bills for others if they are hurt on your property.
When it comes to homeowner’s insurance, there may be things that you own, or are responsible for in your home, that you want special coverage for. This is where riders come in. For example, if you have inherited or purchased an extremely expensive diamond bracelet, you may want to add a rider to your homeowner’s insurance policy that covers jewelry. Another example of this may be adding a rider to insure valuable paintings against fire and theft. To ensure that you are comfortable with what your homeowner’s insurance covers, you must be familiar with the usual exclusions.
Common Exclusions
The New Jersey Department of Banking and Insurance has compiled a list of what is typically not covered by a basic homeowner’s insurance policy.Some of the most common exclusions that you may want additional coverage (riders) for are:
– Water damage caused by flood. The National Flood Insurance Program provides coverage for residents of designated communities, usually residing in flood zones.
– Damage from sewer backup or sump pump overflow.
– Cost of required repairs due to changes in local laws or building codes.
– Liability coverage for a home based business, including business interruption coverage.
– Some homeowner’s insurance policies will cover watercrafts, some will not. Check with your agent or insurer to see if your boat or jet ski can be included.
– Oil tank liability. If you have an active or even inactive fuel tank on your property, you may want to invest in this coverage.
In addition to these, you may want to add more coverage onto the basic plan. The above example about a very valuable piece of jewelry does fall under the Personal Property section of your insurance. However, your insurance plan may have a limit that is much lower than what your piece of jewelry is worth. It is times like these when you may want to pay for additional insurance.
Another rider that you may want to consider is one that guarantees the replacement cost of your home. With guaranteed replacement cost coverage, the insurance company will replace your home with another of similar kind and quality – even if the cost is slightly more than the value listed on your policy.
Conclusion
There are a wide array of benefits to adding riders onto your policy. Many policies do not cover certain acts of God, like wind/hurricane damage, or have very low limits on things like personal property coverage. It is important to read every clause of your homeowner’s insurance policy and learn your exact coverage.
If you are just beginning your search for homeowner’s insurance and are unsure of what is typically covered in your area and or what homeowner’s insurance may cost you, visit Strategic Insurance Agency, Inc. to find the tools to give you a free Quick Quote to get n estimate of the potential cost. A great thing to remember is that homeowner’s insurance is not the only type of insurance that offers riders. Request Quick Quotes for other types of insurance such as business, auto, life and professional liability. Each of these types of insurance have their own list of exclusions and opportunities for extended coverage for an additional fee. Certain insurers may also offer package deals for buying more than one type of insurance from them.
If you have any questions about coverage for specific pieces of personal property or a rider that may or may not be offered, talk to a knowledgeable insurance agent about your concerns. An insurance agent can walk you through the process to ensure your valued property is covered.
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