Earthquakes, heavy snow, tree roots in your sewer line – are damages from these issues covered in a standard homeowners policy?
Spoiler alert: Many times they’re not, but the good news is – home insurance endorsements on your policy will cover these issues and more.
To find out the ins and outs of home insurance endorsements, we reached out to Tim Birkhauser, owner of Spectrum Insurance Group in Wisconsin! Tim has been in the insurance industry for more than 22 years and started his career in personal lines insurance.
What is an endorsement in a home insurance policy?
“An endorsement is an addition to a policy that generally expands the coverage to what the insured needs to protect their possessions, or a house, or their assets properly,” says Tim.
A list of popular insurance endorsements Tim has seen in his area include:
Replacement costs on the house. This endorsement reimburses the cost to rebuild a home to the similar quality and kind of the damaged one.
Guaranteed replacement costs on the house. This covers the full cost to replace the home, even if it’s greater than the insurance contract limits.
Replacement cost on your personal property. The coverage helps you receive brand-new items for the ones you lost.
Water backup and/and sewer backup coverage. This reimburses for overflows or discharge from a sewer or drain, and also covers issues with sump pumps.
Finished basements and specific personal property, such as a wedding ring, may require an endorsement. Over the last 10 years, Tim has also seen a rise in matching siding and roofing, service line, and even identify theft liability coverage.
Identity theft protection
“Identity theft has become a big thing over the last few years,” says Tim, “and we’re starting to see personal cyber insurance as an endorsement or a standalone policy you can purchase.”
The policy won’t cover any credit card losses, but it will help with legal expenses and additional expenses.
“They do generally give a limited coverage of approximately $15,000,” explains Tim. “That’ll help you pay for any expenses you incur while trying to recover your identity.”
Matching siding and roofing endorsement
Damage to the exterior of your home can harm your curb appeal and the value of your home.
“Let’s say you have a hailstorm come through,” explains Tim. “Generally, a hailstorm will come from one direction and may hit one or two sides of your house but not all sides.”
While insurance rules and regulations vary by state, an insurance carrier may only be obligated to repair or replace what was damaged. In Wisconsin, this may mean you end up with mismatched siding.
“If you replace two sides of the house – and you do not have an endorsement – the company may not have to replace the other two sides.”
If you have a matching siding endorsement, then your home will receive completely new siding (and enhanced curb appeal).
Replacement cost of your content
One of the more popular types of endorsements in insurance is the replacement cost of your content. If your home is destroyed by a fire, then you’ll receive payment to replace your lost contents with new ones.
Explains Tim, “Insurance companies will pay you for what they call ‘the depreciated value of each item.’ Once you replace it, the insurer will pay the full replacement cost of the item.”
A home inventory is especially important when it comes to this or any personal property claim.
“I always tell people having pictures or having any sort of documentation just helps you remember what you had,” says Tim. “It’s a stressful time for the insured trying to rebuild and figure out where they’re going to live and how they’re going to work everything out.”
Many times, homeowners won’t remember all the items in the home, including family mementos.
“You will have to create a list for the insurance company, and it’s a lot of work,” says Tim. “The more documentation you have, the better you’ll be at the time of loss.”
Natural disaster endorsements
You may be surprised just where homeowners may need earthquake endorsements.
“I can think of a couple of clients who carry earthquake insurance,” says Tim. “In Wisconsin, I would call that earth movement coverage, which is generally excluded from a standard policy.”
Flood insurance is another frequent home insurance endorsement. If you live in a designated flood zone and have a mortgage, you will be required to add coverage for water damage created by floods.
Heavy snow can also wreak havoc on homes.
“Where we live, our policies usually include collapse,” says Tim. “We’ve had times where we’d get 12 or 14 inches of heavy snow in the spring, and we have buildings – especially pole barns – that may collapse from the weight of ice and snow.”
When in doubt – always talk to your insurance agent
“It’s just important to sit down and talk with your agent about all the personal property you have,” says Tim.
There may be items that require extra coverage, such as recreational vehicles and other expensive items.
“A homeowner may have a utility tractor that they use outside their property,” says Tim. “If this tractor is driven down the road or used off premises, you will want to make sure you have liability extend to the tractor.”
Is it expensive to add an endorsement to a homeowners policy?
Home insurance endorsements vary by cost, but they generally aren’t expensive to add to a standard insurance policy.
“When we quote a policy, we’re including all of these coverages in there,” says Tim. “Then we explain to the insured what each item costs and move forward once we have the right policy.”
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