Insurance Riders: Customized Coverage for Your Home

If the standard insurance policy available for your home, condo, or apartment is insufficient, you can extend your coverage with riders. Insurance riders are add-ons that modify your policy so it offers greater protections. They're fairly common for homeowners, condo, and renters insurance. 

Standard protections on homeowners, condo, and renters insurance

Homeowners, condo, and renters insurance policies vary in the amount of coverage each offers for the structure of your home. Homeowner's policies have the most thorough coverage of your home's structure. If a covered incident -- such as a fire -- damages that structure, your insurer pays for the repairs up to stated policy limits. Condo insurance may do the same, but your coverage usually only applies to the inside of your dwelling. Your condo association's insurer would be responsible for structural damage to other parts of the building. 

Outside of the differences in structural coverage, the features of homeowners, condo owners, and renters insurance are quite similar. All three provide some level of reimbursement for damaged personal items as well as living expenses following a covered loss. These policies also come with personal liability insurance, which protects you if someone suffers an injury at your home. 

Common riders for homeowners, condo, and renters insurance 

While those general protections might seem sufficient, the fine print of your policy likely reveals limitations -- particularly with respect to personal items or the equipment in your home office.

For example, most policies have low limits for personal belongings, especially jewelry. A common structure would be reimbursement of up to $1,000 per piece of jewelry damaged or a maximum jewelry payout of $2,500. And that's after you pay your deductible. Also, your insurer may only pay on the claim if someone steals your jewelry, but not if it's lost or damaged by flooding.

It's also standard for your insurance to exclude any property you use for business in your home office. 

If you have expensive jewelry, artwork, antiques, fur coats, other collectibles, or valuable business furniture and equipment, a standard insurance policy on your home, condo, or apartment probably doesn't provide enough coverage. That's where riders come in. 

Below are some common insurance riders that apply to homeowners, condo owners, and renters. 

Jewelry or scheduled property rider 

A scheduled property rider will increase your limits on your high-value personal items, such as jewelry or collectibles. It can also lower your deductible on those claims and widen your coverage to include lost pieces. You will need to inventory the covered items and establish their value with appraisals. 

If you only need coverage for a single item -- like your engagement ring or favorite fur coat -- ask your insurer or agent to price a floater along with the rider. A floater is a more specific type of policy modification and it may be less expensive than a rider. 

Business property rider 

If you run a business from home or regularly work remotely, you may need to add coverage for your business equipment, inventory, or supplies. A business property rider provides this. 

Earthquake coverage rider 

Standard homeowners, condo, and renters insurance policies exclude any structural or personal property damage that occurs during an earthquake. You might not feel comfortable with that exclusion if you live in Southern California or another region that's prone to earthquakes. 

Water backup rider (for homeowners and condo owners) 

Fun fact: Your homeowners or condo insurance policy may not cover damage that results from a backed-up drain. Often, your water damage coverage kicks in only when a pipe bursts. A water backup rider addresses that coverage gap. 

Landscaping rider (for homeowners) 

A landscaping rider adds coverage for your yard. Typically, if a wild storm knocks a tree down on your house, the insurer only pays for the structural damage to the home. If you don't have a landscaping rider, you will fund tree removal and replacement. 

Pet damage rider (for renters)

If your cat or dog stains the hardwood floor in your apartment, a pet damage rider on your renter's policy can keep you out of trouble with your landlord. These riders vary across insurers in terms of deductibles and exclusions, so read the fine print carefully before you sign up. 

In general, insurance riders on homeowners, condo, and renter's policies are affordable. The big exception can be earthquake insurance, depending on where you live. When evaluating the costs and benefits of an insurance rider, remember to place some value on the peace of mind a rider can provide. Riders do tend to cover less common scenarios, but knowing you're protected might justify the cost.