Customized Car Coverage: Auto Policy Riders and Endorsements

Shopping for car insurance presents as many options as an a la carte menu at a Chinese restaurant. Although, admittedly, deciding if you want the chicken lo mein and shrimp fried rice is way more fun than adding collision, comprehensive, and uninsured motorist coverages to your auto policy. 

The thing is, the customization options for your auto insurance don't stop with lines of coverage. You can also get other add-on features, known as endorsements or riders.

Auto lines of coverage 

The main lines of auto coverage are property damage and bodily injury liability, uninsured motorist protection, comprehensive, collision, personal injury protection, and medical payments coverage. While these protect you in a wide range of driving scenarios, there may be reasons why you'd want even more coverage.

Popular car insurance riders / add-ons / endorsements

You can get the added protections you need with auto insurance riders, more commonly called policy endorsements. Here's a closer look at four of them (though there are other car insurance endorsements as well). 

Rideshare rider

Yes, companies like Lyft and Uber provide automatic coverage for their drivers while they're on the job, and typical car insurance does provides coverage when you're not working. However, many insurers don't cover both when you're logged in before you accept a ride, and after you drop a ride off and haven't gotten a new ride yet. As a way to plug that gap, some insurers offer rideshare protection as an optional paid addon.

Roadside assistance rider 

Roadside assistance programs provide services like towing, battery jumpstarts, fuel delivery, and tire changes. You can buy a roadside assistance plan independently, but it's often more affordable to add it to your existing auto policy.  

Replacement cost rider 

If you total your car or someone steals it, a standard auto policy reimburses you for the car's actual cash value, less your deductible. That actual cash value includes depreciation, which means the amount won't be enough to buy you a new car. Some insurers address this by offering a replacement cost upgrade that increases your payout in a total loss so that you can afford to buy a new car with similar features.¹

Gap insurance rider 

Gap insurance increases your payout on a total loss claim so that it's sufficient to repay your outstanding auto loan.² Say you owe $28,000 on your auto loan, but your insurer only pays out $26,000. Gap insurance pays the difference, so you don't have to fund the $2,000 out of your own pocket.  

Aftermarket equipment rider 

Comprehensive and collision coverages only pay to repair and replace factory-installed equipment.³ If your car has, say, aftermarket suspension, wheels, and tires, you may want an aftermarket equipment endorsement on your policy. You will have to inventory and document the parts you want the rider to cover. 

If your car is brand-new or heavily customized, it's smart to consider enhancing your auto coverage. These endorsements do raise your auto insurance premiums, but the cost is usually small relative to what you'd save if you have to use that extra coverage.