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What Is an Insurance Rider?

An insurance rider can add coverage, exclude coverage or modify an insurance policy in some other way. Aside from an exclusionary rider for health or life insurance, a rider typically expands your existing coverage at an additional cost. Insurance riders are available on all types of insurance policies, including home, auto and life. Scheduled property coverage, for example, amends a home insurance policy to extend coverage to valuables, like jewelry, collectibles and instruments.

Insurance riders are typically optional but the additional coverage can be useful depending on your needs and lifestyle. Keep reading to learn how insurance riders work and some considerations before buying one.

Insurance Rider Definition

An insurance rider, also called an insurance endorsement, amends an existing insurance policy, usually to expand your coverage. An insurance rider can widen your personal property coverage to include valuables in a home insurance policy or by adding an insured person to your life insurance policy. Since riders often expand your coverage, they often come at an additional cost.

There are also exclusionary riders, which can restrict coverage. Many health insurance policies, for example, have exclusionary riders that exclude coverage for a specific health condition or a body part.

An insurance rider can add coverage, exclude coverage or modify an insurance policy in some other way.

Insurance riders shouldn't be confused with standalone insurance policies. Riders tend to be addendums to an existing insurance policy while standalone insurance policies are treated as a separate policy. Flood insurance for your home is commonly treated as a standalone policy, and may be purchased from a different insurer from your regular home insurance.

How Do Insurance Policy Riders Work?

Depending on your insurer, you can add an insurance rider to your policy at the time of purchase, mid-term or when your policy renews. For riders that expand your coverage, there will be an additional cost in premium payments.

Riders that add coverage

Scheduled property coverage is a common example of an insurance rider that adds coverage. With this rider, you add or "schedule" specific items to your policy, which will increase your premium. Items commonly scheduled on a home insurance rider may include:

  • Jewelry

  • Paintings and artwork

  • Collectibles (e.g., wine, spirits, stamps, coins, silver)

  • Musician instruments

  • Firearms

Another example is a rideshare or ride-hailing endorsement. Your personal auto insurance policy does not fully cover you while you're using your vehicle for ride-sharing services.

Riders that exclude coverage

Exclusionary riders are more commonly found in health and life insurance policies. In a health insurance policy, an exclusionary rider may exclude coverage for a certain health condition or a body part. A life insurance exclusionary rider may exclude coverage if an accident or death was the result of a self-inflicted injury or the commision of a felony.

Riders that modify your policy in another way

Not all riders necessarily add or restrict coverage, but can also modify your insurance policy in a different way. These types of riders are more common in life insurance policies.

A right to convert term life insurance rider is an example of an insurance rider that doesn't add or exclude coverage. Instead, a right to convert rider allows a life insurance policyholder to convert their term insurance to permanent life insurance when the initial policy reaches maturity.

Types of Insurance Riders

Riders are sold across all types of insurance policies. Below, we list some common insurance riders in auto, homeowners and life insurance policies.

Examples of auto insurance riders

Beyond standard auto insurance coverage, your insurance company may also sell the following riders:

Examples of homeowners insurance riders

To further protect your home, you may also want to consider the following riders:

An insurance rider can widen your personal property coverage to include valuables in a home insurance policy.

Examples of life insurance riders

Below are some common riders your life insurance company may offer:

  • Accelerated death benefit

  • Accidental death benefit

  • Automatic premium loan provision

  • Children rider

  • Cost of living rider

  • Disability income

  • Guaranteed insurability

  • Payor benefit rider

  • Spouse rider

  • Term riders

  • Waiver of premium

  • Waiver of mortality deduction charges

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When Do You Need a Rider?

Most insurance riders are optional. The value of paying additional for a rider will depend on your lifestyle and needs. Rideshare coverage is useless for someone who doesn't use their vehicle for ridesharing services, for instance. However, if you own high-value musical instruments and artwork that may not be covered under standard homeowners insurance, you may want to purchase a rider to get those items covered.

Benefits of Insurance Riders

Although insurance riders can increase your insurance premium, there are several benefits worth considering:

  • Expanded coverage: Insurance riders can plug holes in your protections that are otherwise left exposed in a standard home, renters, auto or another type of insurance policy.

  • Potential savings: Accidents and tragedy can strike when you least expect them. Purchasing additional coverage via insurance riders can help offset the costs of repairing, rebuilding or replacing items after a covered loss.

  • Peace of mind: Although insurance riders come at an additional cost, they may offer you some peace knowing that you're covered during covered events.

  • Flexibility: Since insurance riders tend to be highly specific, you can purchase riders that tailor your policy to your needs.

How Much Does It Cost To Add a Policy Rider?

Due to the wide range of riders available, the cost to add a rider to your policy will vary by type and your insurance company. Scheduling jewelry in your home insurance policy, for example, may cost up to $2 per $100 in value. Adding terrorism coverage to a commercial insurance policy may range from $19 to $49 million depending on the property value according to the Insurnace Information Institute.

Consult your insurance agency for deeper insight on how adding insurance riders can affect your premium.

Many health insurance policies have exclusionary riders that exclude coverage for a specific health condition or a body part.

Insurance Rider FAQs

What is a rider in insurance?

An insurance rider is an amendment to an existing insurance policy usually to expand your coverage at an additional cost. For example, identity theft protection is a home insurance rider you can purchase that can cover lost wages, attorney fees and more if you're a victim of identity theft.

Does a rider cost more money?

Purchasing a rider to expand or modify the coverage in your existing insurance policy typically comes at an additional cost.

How can I drop an insurance rider?

If you wish to drop an insurance rider you already purchased, you would need to contact your insurance agent. Some insurers may allow you to edit your coverages mid-policy, while others may require you to make changes during certain time windows.

Insurance for Any Need

Insurance riders are available for home, auto, life, renters and other types of insurance policies. The type of rider you need, if any, will depend on your needs and budget. Many consumers already have a general idea of what they need but finding the right insurance company can be challenging.

SmartFinancial can help with free quotes. Fill out a quick questionnaire and get matched with an insurance policy based on your answers about your policy coverage needs and budget. Enter your zip code below to get started.

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