Insurance Rider: Definition, How They Work, Types, Cost & Examples

What Is An Insurance Rider?

An insurance rider (AKA an insurance endorsement) is an amendment that changes your currently existing policy. Paying for an insurance rider can better tailor the policy to fit your lifestyle and situation. 

Sometimes the original policy you’ve purchased doesn’t feel like it meets your new standards or lifestyle anymore. Fortunately, an insurance rider can change the policy so that it fits your new needs and expectations. 

Other times, you can opt for an insurance rider at the moment of purchase — this gets you more personalized coverage right from the start. Many insurers will offer endorsements so that their customers can get more personalization when it comes to choosing their insurance policy details.   

Insurance riders are great if you want some additional, specific coverage that would otherwise be excluded from your policy. However, that isn’t the only thing an insurance rider does. A rider may also exclude coverage or modify the existing coverage in some way or scope. 

The three main things an insurance rider does are: 

• Change your policy to have additional coverage, such as increased limits  
• Reduce your policy to have less coverage/exclude coverage for certain claims
• Expand or shift the focus of your coverage 

How Do Insurance Riders Work?

You can add an optional insurance rider (or endorsement) to your insurance policy by telling your insurance company. An issued insurance rider will typically increase your insurance premium, but not by a significant amount. For those seeking extra coverage or changes to their policy, it’s usually a good idea to consider getting an insurance rider. 

When you buy an insurance rider, it can also be said that you’re adding or scheduling an item. 

You can add a rider to your insurance policy by getting it issued at the time of purchase, at the time of renewal, or essentially at any time during the term of the policy. Depending on what kind of insurance rider you’re receiving, the payment and process can vary. 

Oftentimes, adding a rider means there needs to be an appraisal done. You might need to provide detailed information surrounding the item that you want to get covered or modified. 

Benefits Of Insurance Riders

Better coverage 

Countless Americans are shopping for insurance each year. Insurance companies might standardize the policies that they offer to meet the needs of the average insurance shopper. Unfortunately, this means that the policy might have a gap in coverage or excludes a peril you’re worried about. 

A huge benefit of insurance riders is that you can have more control over what coverage you’re getting. Riders enable you to change your policy details to better fit your particular needs. 

Of course, better coverage for you doesn’t always mean you’re receiving additional coverage from an insurance endorsement. Sometimes, a rider means you’re reducing coverage limits so that you aren’t getting excessive coverage you don’t think is useful.  

You can increase your savings 

Adding an insurance rider to your policy could save you money, especially in the long run. If you’re reducing your coverage limits or excluding covered claims and perils, you might even be able to negotiate a better premium depending on your insurer. 

You gain more control over deductibles 

Your basic policy deductible might not be optimal for your budget. If the deductible is too high or low, you could get a special insurance rider to modify the deductible. Adding a rider is a great way to take control of your insurance situation. 

At the end of the day, it’s your choice whether you want to get any insurance riders for your policies. Generally, people enjoy being able to personalize their insurance coverage. Remember that it’s advisable to consult professional services if you want individualized counsel, since this article does not amount to official insurance advice and merely offers generic information you should know.  

Types Of Insurance Riders

Insurance riders are very common in the insurance industry across the board. Here are some of the more common types of insurance riders you might encounter and specific riders that you might find helpful. 

Auto Insurance Riders 

If you drive or own a vehicle, you will likely need auto insurance. The basic auto insurance policy might not offer you adequate coverage, or the coverage limits might be higher than you need. You might also want to add an exclusion endorsement.  

Common car insurance riders are:

• Custom equipment insurance rider 
• New vehicle replacement rider
• Gap insurance 
• Antique car endorsement 
• Ridesharing insurance endorsement 
• Excluded driver 

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Excluded driver rider is a type of endorsement that your insurance company may actually require you to add. Essentially, it’s sometimes necessary or desirable to exclude a named driver from your policy because they are an unsafe, risky, or otherwise inexperienced driver. 

Kansas, Michigan, New York, Virginia, and Wisconsin are the five states that don’t allow you to exclude drivers from your auto insurance policy. 

Homeowners Insurance Riders 

Homeowners might want to purchase a homeowners insurance rider on top of their basic policy for additional coverage. This is because the basic homeowners insurance policy typically comes with a lot of excluded perils (i.e. covered risks), and the basic policy only usually covers Dwelling, Other Structures, Personal Property, and Personal Liability. 

Insurance riders you might want to consider getting are:

• Business property coverage 
• Building code coverage
• Identity theft coverage
• Scheduled personal property coverage 
• Water backup coverage 

Home and property damages can get quite expensive, so it’s a good idea to check your policy’s deductibles and coverage limits so that you have a better idea of what extra riders might benefit you the most. 

Life Insurance Riders 

Life insurance is an important type of coverage that helps provide protection to a policyholder’s loved ones and beneficiaries. However, the basic life insurance policy might be lacking something more specialized to fit your situation. 

If you want to customize your life insurance policy, you should be aware of the following common life insurance riders.

• Accelerated death benefit rider
• Guaranteed insurability rider
• Child term rider
• Waiver of premium rider
• Return of premium rider
• Family income benefit binder
• Long term care binder 
• Accidental death 

Not all riders are helpful to your particular situation, but some can offer powerful protection.  

Cost Of Insurance Riders

Like with all things insurance, you might be wondering if an insurance rider is worth the hassle. Knowing the cost of insurance riders can help you stay informed and keep yourself better protected. 

The typical insurance rider doesn’t cost much to underwrite, and it shouldn’t cost more than a few percentages of your premium over time. This might be a few extra dollars each billing cycle. The specific costs of each insurance binder can vary depending on what you want to add and what insurance company is responsible for underwriting your policy.  

Insurance Rider Examples

It can get overwhelming to imagine all the additional items and purposes for which you might want an endorsement. 

Here are some insurance rider examples to help get you started on what items you may want to schedule on your own insurance rider. 

If you want to get extra coverage in case your items and property are damaged or lost, insurance endorsement options include:

• Specialty goods 
• Special collections 
• Valuable jewelry 

If you’re looking for better life insurance benefits for you and your loved ones:

• Accelerated death benefits
• Accidental death rider 
• Long term care rider 
• Guaranteed insurability rider 

Insurance Rider FAQs

1. How do I get an insurance rider? 

You can get an insurance rider by letting an insurance representative know that you would like to make a change to your insurance policy. This can usually be done online, at an office in person, or via phone. After requesting the insurance rider, make sure that it is accepted and underwritten by verifying with your insurance company afterwards. 

To add an insurance rider, you may have to pay for it, which usually means a slightly more expensive premium. 

2. Is an insurance rider the same as an endorsement?

Yes. Insurance riders and endorsements refer to the same thing. 

3. How much is an insurance rider?

If you’re adding additional coverage or modifying your coverage so that it suits your needs better, you usually have to pay a slightly higher premium. However, if you’re modifying your coverage so that there is less coverage, you might not need to pay to get the endorsement.

4. Does an insurance rider have a deductible?

It’s possible. Depending on your type of insurance rider, you might have to pay a fee or deductible to activate it. 

5. How long do insurance riders last?

The insurance rider will usually last just as long as your policy, unless you choose not to renew the rider or you no longer meet the requirements for the rider. The policy might list a time limit for the rider, in which case that specified duration will be how long your rider(s) will last.

6. Are insurance riders optional?

In nearly all cases, insurance riders are optional modifications to your policy. However, your insurance company might require you to get a rider in some situations, such as the excluded driver rider (for auto insurance), in which case you might lose coverage if you do not purchase that particular rider. 

7. What is the best insurance rider?

The insurance rider with the best benefits and value will depend on what your specific needs are. 

If you’re trying to find good coverage with competitive pricing, reach out to our professionals at Worth Insurance. We can help you with your insurance shopping needs by providing you with quick quotes, personalized policies, and more.