Riders & Endorsements: Modifying Your Coverage

Everyone has heard of Endorsements and Riders, but what exactly do they mean? What do they do to my insurance policy? What does it mean to have a ‘standard’ or ‘non-endorsed’ policy? What is an 'Endorsed' policy then?

Using the Homeowner's policy as an example, the ‘standard’ or ‘non-Endorsed’ Homeowner’s policy is the basic, unchanged Homeowner’s policy. This ‘standard’ policy generally is set by the Insurance Services Office (ISO) who makes template policy language for all types of insurance (Homeowner’s, Auto, Commercial, etc). These template policies are then used by actual insurance companies. Some companies use them verbatim, while other companies add or subtract things to change the ‘base’ coverage. However, there are some things that are never included in the ‘base’ form, such as water damages and earthquakes. These and other perils can be insured by separate policies or by policy endorsements and Riders.

Endorsements and Riders are related insurance terms, as both change your standard policy. The difference is that a Rider typically refers to an added coverage to your policy, while an endorsement can be made to add or subtract coverage, or just to change an address or add/subtract a mortgage holder. Either way, if a policy has been changed from its original form, it will then be referred to as an 'Endorsed' policy, and if your policy is referred to as an ‘Endorsed' policy, that typically means that it has added coverages that the ‘base’ policy doesn't have. An example could be a policy that has Sump Pump Backup coverage added to it. In this case, the Sump Pump Backup coverage would be an example of a Rider, but the policy would be referred to as an 'Endorsed' policy.