Thursday, November 20, 2014

Homeowners Insurance: Common Endorsements

One of the most sought-after forms of insurance, a homeowners insurance provides compensation for damages to one’s home and most personal belongings within its premises. While the standard policy would typically see to disasters such as fire, lightning, and storm and hail, or crime like vandalism and theft, events such as earthquake and flooding fall outside of the standard insurance’s coverage.

As such, amendments and additions to the coverage, called “endorsements,” are purchased for property susceptible to certain events and damages. Endorsements are either elective or mandatory. Some localities could mandate certain endorsements. In areas susceptible to earthquakes (such as California, for instance), the earthquake endorsement is a must in every insurance policy.

Take a look at some examples of common endorsements below.

Earthquake endorsement

Apart from earthquakes, this endorsement will compensate for damages by volcanic eruptions, landslides, and other types of destructive earth movement. Under this provision, shocks that occur within a 72-hour period will often be considered as a single earthquake.

Scheduled personal property endorsement

Standard insurance policies offer limited coverage to expensive items and personal effects, among them jewelry, furs, computers and cameras, antiques, musical instruments, art pieces, and collector’s items, to name a few. This endorsement allows for better compensation in case of loss or damage.

Extended replacement cost endorsement

This endorsement will pay a certain percentage over the insurance limit to replace or rebuild a damaged home. 

Equipment breakdown endorsement

An added coverage to see to the repair or replacement of electronic equipment, often caused by problems in mechanical, electrical or pressurized systems.

Identity fraud coverage

This provision covers loss, theft, and unauthorized use of credit cards, checks, and other documents used to validate your identity or pay for purchases.


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