When searching for home or auto insurance, you want to ensure you have a well-rounded, cost-effective plan to meet your needs.
But sometimes, you need a little extra protection on your policy to meet specific needs that your standard policy might not fully address.
That’s where endorsements come into play.
An endorsement is a modification or addition to a standard insurance policy, covering risks that your basic policy doesn’t cover. It offers people the opportunity to tailor their policies according to their unique risk factors and coverage needs. Endorsements may also come at an additional cost to your standard policy.
Five Common Home Insurance Endorsements
Let’s review five popular home insurance endorsements.
- Sewer backup: Covers damage due to water backing up through sewers, sump pumps or drains. This includes water removal, removal of damaged materials, repairing water damage to floors and walls, and replacing damaged property and fixtures.
- Overland water: Covers damage from water that overflows and enters the openings of the home such as doors and windows. It could happen due to a river or lake that has overflowed its banks, or from pooling water from heavy rain or rapid snowfall melt.
- Earthquake: This covers damage to the structure and contents of a home caused by earthquakes, imperative in areas with high-seismic activity.
- Personal property: Provides additional coverage, above your base policy, for valuables such as jewelry, fine arts or electronics.
- Home-based business: If you are running your business from home, this endorsement adds coverage for your business equipment, inventory and liability. Note: Not all home-based businesses qualify, depending on the scope of work. Please speak with your advisor to see if you qualify.
Five Common Auto Insurance Endorsements
Now let’s look at five common auto insurance endorsements.*
- Limited waiver of depreciation: Ensures that in the event of a total loss, you receive the full purchase price of your new vehicle, not the depreciated value, often available for vehicles less than two years old.
- Loss of use: This covers the cost of a rental car, taxi or other form of transportation while your car is being repaired due to being in a collision. Your replacement vehicle will have to be similar to your regular vehicle and you will have a coverage limit.
- Rental vehicle insurance: Provides collision and comprehensive coverage for rental vehicles, eliminating the need to buy rental agency insurance.
- Family Protection: Provides additional coverage if you or your family are injured by an underinsured or uninsured driver.
- Accident Forgiveness: This protects your premium from increasing as a result of your first at-fault collision.
* Coverages and options vary by province. Please speak with your Auto Insurance Advisor.
Frequently Asked Questions
Q: Why do I need an endorsement? Why isn’t everything covered under my insurance policy?
A: Insurers create standard policies to cover risks most policyholders face. Including every possible risk would make premiums prohibitively expensive for most people. By making additional coverages optional, insurers allow policyholders to tailor their policies to meet their needs without increasing costs for everyone.
Q: How do I get an insurance endorsement added to my standard policy?
A: Getting an insurance endorsement added to your policy is as simple as contacting your Acera Insurance advisor and letting them know what you want to be included or excluded. You can get an endorsement added at the beginning of the policy and at renewal time. Some may only be added mid-term. Your advisor will be able to answer all of your questions and suggest endorsements that may fit your needs and when they can be added.
Q: Do endorsements always increase my premium?
A: It depends on the endorsement. If the endorsement expands your coverage, such as sewer backup or a waiver of depreciation, then your premium will typically increase. Some endorsements can lower your overall premiums because they reduce the insurer’s risk. This includes things like higher deductibles or a restricted driving endorsement.
Q: Is it worth adding an endorsement to my insurance policy?
A: If you live in an area prone to certain risks, such as flooding or sewer backups, then an endorsement tailored to that risk can be invaluable. Likewise, if you own expensive items such as jewelry or art that exceed the limits in your standard policy, a personal property endorsement can be worth it. Weigh the cost of your premium over how much you would be paying out of pocket for repairs or replacement.
Q: Do endorsements automatically renew when your policy renews?
A: In most cases, an endorsement on your insurance policy will automatically renew when you renew your policy. With that said, you should always review your endorsements each year, just to make sure they still fit your needs.
If you have any questions, get in touch with an Acera Insurance advisor today.