Homeowners Insurance Policy Endorsements
Purchasing sufficient coverage for your home and your personal property is an important decision. Your homeowners insurance policy may not provide you with all of the benefits and options you need to protect your home and personal property, and it may be necessary to enhance or make changes to your policy. Most homeowners insurance companies offer endorsements for this purpose.
What exactly is an endorsement?
An endorsement is an addition or adjustment to your insurance coverage, terms or conditions of the policy. An endorsement is also referred to as a rider or an amendment. It is simply a way for you to add or change the coverages on your policy so you will have the additional coverage you need for your home and personal property.
There are several endorsements that insurance companies offer as an option. Depending on the type and cost of the endorsement, your premium may increase or decrease. The endorsements that provide you with more coverage may also require you to pay a specific, separate deductible that you are responsible for.
Don’t Forget To Read Your Policy And Endorsements
Typically, an endorsement will include the following language:
This endorsement changes the policy. Please read it carefully.
If you purchase an endorsement and you are not sure how the endorsement changes your policy after you have read it, contact your insurance agent or insurance company to address your questions or concerns.
Personal Property Replacement Cost Coverage
The Personal Property Replacement Cost Coverage provides you with the replacement cost of your personal property if your home’s contents are damaged or stolen. Your homeowners insurance policy may provide actual cash value coverage for your personal property.
- Actual cash value is the amount it would cost to replace your damaged or stolen property at the time of the claim minus depreciation.
- Replacement cost coverage provides the cost to replace the item at the present time, regardless of the decreased value.
For example, if your home was broken into and your television along with some other personal items you purchased several years ago were stolen, with an actual cash value policy your insurance company would pay you the full cost to replace the items minus a reduction due to the age or condition of the items. On the other hand, if you had replacement cost coverage, your insurance company would pay you the full cost to replace the items regardless of the age or condition of the items.
Tip: This coverage is not intended to upgrade your personal property but to replace your personal property that was damaged.
There are two types of mold endorsements: property and liability.
If your home incurs damage due to mold, you may need mold testing, removal or cleaning. Those costs may exceed the limit on your homeowners insurance policy. This endorsement allows you to increase the mold damage coverage limit to $25,000 or $50,000. However, your insurance company may offer additional limits.
This endorsement allows you to purchase coverage or additional coverage that will pay for claims from others that you may be held liable for because of mold in your home. For example, if someone got sick from mold and sues you. There are various coverage limits you can purchase.
Tip: Since mold can hide behind walls, under carpet, behind appliances, etc., take necessary measures to ensure a professional mold remediation assesses and removes the damage.
Screened Enclosure and Carport Coverage
This endorsement provides coverage for screened enclosures and aluminum-framed carports that are damaged as a result of a hurricane. Some insurance companies may limit or exclude coverage for screened enclosures and will typically offer an option to purchase limits of $10,000, $25,000, $50,000 or higher. Some insurance companies also include coverage with this endorsement for awnings and pool cages damaged as a result of a hurricane if not already covered by the policy.
Tip: Since the definition of a screened enclosure can vary by company, check your policy to determine if you have coverage or enough coverage.
Water Backup and Sump Discharge or Overflow Coverage
Tip: Water backup can create costly damage; therefore, talk to your insurance agent to learn more about Water Backup and Sump Discharge or Overflow Coverage.
Sinkhole coverage provides you with protection for sinkhole damages to your home and to your personal property inside the home. Per Florida law, every insurance company must provide coverage for catastrophic ground cover collapse as a part of your policy. However, if you want sinkhole coverage, it can be purchased for an additional premium.
There is a difference between sinkhole coverage and catastrophic ground cover collapse coverage.
- Catastrophic Ground Cover Collapse
To be considered catastrophic ground cover collapse, four criteria must be met: a sudden collapse of the ground, a depression in the ground that is clearly visible, structural damage to your insured property including the foundation, and your insured property is condemned and ordered vacant by the government.
- Sinkhole Damage
If your insured property incurs structural damage, including the foundation, caused by settlement or weakening of the ground, then you may have sinkhole damage and will need sinkhole coverage to cover the costs of repairs. For example, if you notice cracks in your walls or the foundation, this could be covered by sinkhole coverage. Your personal property could also be covered if there is structural damage to your home caused by a sinkhole. To purchase sinkhole coverage, the insurance company may require an inspection first.
To learn more, review the Department of Financial Services' Division of Consumer Services' Sinkholes and Catastrophic Ground Cover Collapse Guide.
Tip: You may want to request additional information such as the history of sinkhole activity on your home or nearby homes, the company’s requirements to obtain sinkhole coverage, and the deductibles regardless of whether your home is in an area at a higher risk for sinkholes.
Animal Liability/Limited Dog Liability Coverage
These endorsements provide you with liability coverage if an animal you own or keep injures someone. It may provide coverage for certain animals specified in the policy that are not covered by your homeowners policy. The addition of this endorsement typically provides liability coverage and medical payments coverage if your animal/dog injures another person.
Tip: If you have pets and are not sure if you would be covered if they attack or bite someone, you should ask your insurance agent about this coverage.
Equipment Breakdown Coverage
This endorsement provides you with coverage to repair or replace equipment or machinery that breaks down suddenly and accidentally. This coverage protects your appliances due to an electrical or mechanical failure. This coverage is sometimes seen as being similar to a home warranty, but the amount of coverage and the premium are typically the differences. For example, an equipment breakdown endorsement can provide $100,000 in coverage for an average premium of $50.00 for the year, whereas, a home warranty may cost more. Other equipment that is typically covered by this endorsement includes heating and air conditioning systems, computers and computer equipment, water heaters, back-up generators, refrigeration systems, boilers and furnaces.
Additional benefits offered with Equipment Breakdown Coverage include reimbursement for spoiled inventory (food) resulting from failure of covered equipment, costs incurred for temporary repairs, costs incurred for permanent repairs or replacement, and additional living expenses resulting from damages covered by the endorsement.
Tip: Just like most warranties and policies, if the damage is caused by conditions such as wear and tear, rust or corrosion, this coverage will not apply.
This endorsement provides you with the opportunity to purchase several coverage options at a discounted premium. The coverage options in the Package Endorsement are selected by the insurance company and are combined into one endorsement for your convenience.
For example, with a package endorsement you may have personal property replacement cost coverage, screened enclosure and carport coverage, animal liability coverage, equipment breakdown, and several other coverage endorsements. Instead of having several different endorsements to maintain, you can purchase the Package Endorsement typically at a discounted premium compared to purchasing individual endorsements with different premiums that could cost you more.
Tip: Even though you may save money with a Package Endorsement, determine if it will be beneficial for you to purchase the endorsement based on the additional coverages included. For example, if you don’t own a dog/animal, don’t have a screened enclosure or don’t need some of the other coverages in the Package Endorsement, would it be a cost savings to purchase a Package Endorsement?
The endorsements below will lower your premium or provide a premium discount.
Coverage B Exclusion
Coverage B, also known as Other Structures on your policy, provides coverage on property that is not attached to your home. Some examples are sheds, unattached garages, swimming pools, gazebos, fences, and driveways. This endorsement allows you to remove Coverage B from your policy.
Tip: You may not have other structures now and decide to remove the coverage. If you purchase structures in the future, inform your agent to ensure you’re properly covered.
Personal Property Exclusion
Coverage C is known as personal property or contents coverage. This endorsement allows you to remove Coverage C from your policy. Per Florida law, you can remove coverage that insures your personal property/contents; however, if you are a condominium unit owner or a renter, you are not eligible to exclude the coverage. The endorsement must include your handwritten statement as required by law. The statement must also be signed and dated by every named insured on the policy. Removing personal property coverage means you will only have coverage for your home but not your contents or personal belongings.
Tip: You can only remove the endorsement to become effective on the renewal date. The endorsement to remove personal property will apply for the entire term of your policy and for each renewal of your policy. Therefore, you should make an informed decision before considering this option.
Preferred Contractor Endorsement
This endorsement is offered by several insurance companies to encourage you to use a contractor, also referred to as a preferred vendor, from an approved list provided by the company for the repairs to your home. By purchasing this endorsement, you will receive either a premium discount or a discount of your All Other Perils deductible listed on your declarations page. The discount does not apply to the hurricane or sinkhole portion of the premium nor the hurricane or sinkhole deductibles. Typically, the work performed by the preferred contractors/vendors is guaranteed by the insurance company.
Tip: The endorsement includes several conditions and requirements so make sure you understand what is involved and if the endorsement is suitable for your needs.