Many homeowners believe their insurance policy covers everything, only to discover during a claim that some costly risks need extra protection. These optional add-ons—known as riders, endorsements, or floaters—are often overlooked but can prevent significant financial loss when unexpected issues arise.

As natural disasters increase and homes age, riders have become crucial. Flooding accounts for about 90% of U.S. natural disasters. Building codes have become stricter, and even mild tremors can cause structural damage not covered by standard policies. With high-value possessions, home businesses, and remote work becoming more common, reviewing your coverage annually is a wise financial move.

Flood and Water Damage Insurance

Standard homeowner policies usually don’t cover floods from outside the home or water damage that isn’t sudden or accidental. For those in flood-risk areas, a standalone flood policy is essential. Flood insurance might be mandatory in high-risk zones, but due to increasing flood incidents, more people need extensive coverage. A water-backup rider offers additional protection against sewer or sump-pump backups and groundwater damage.

Flood insurance via FEMA’s National Flood Insurance Program (NFIP) averages $899 annually, with structure coverage up to $250,000 and $100,000 for contents. Private insurers may offer higher limits or faster payouts, crucial in areas with rebuild costs exceeding NFIP limits. Notably, one-third of flood claims happen outside high-risk zones, exposing uninformed homeowners to significant risks.

Water-backup riders, costing $50–$250 annually, typically cover $5,000–$25,000 for sewer or sump-pump backups. Since insurers often differentiate between “surface flooding” and “water backup,” confirming policy definitions is vital. Installing backflow valves or battery-backup sump pumps might even earn a 5%–10% discount.

Seismic and Earthquake Coverage

Earthquake damage isn’t typically covered unless specific protection is added. In earthquake-prone areas, this coverage may be required. However, even in safer zones, ground movement can damage your home’s foundation or plumbing. A seismic rider provides an extra safety net.

Most major insurers offer earthquake coverage as a separate policy or endorsement, especially in states like California, Washington, Oregon, and parts of the Midwest. Deductibles usually range from 2% to 20% of your home’s insured value, potentially leaving significant costs uncovered. Despite high deductibles, foundation or structural repairs can be costlier. Many endorsements include emergency repairs and debris removal, reducing immediate out-of-pocket costs post-earthquake.

Building Code Upgrade Coverage

If damage necessitates repairs or rebuilding, bringing your home up to current building codes might be required, even for minor issues. Without this rider, additional upgrade costs fall on you. A building code rider covers these expenses.

Modern building codes change rapidly, especially regarding insulation, wiring, plumbing, HVAC efficiency, and structural integrity, often increasing rebuilding expenses by 10%–20%. Standard policies rarely cover these additional costs. Ordinance or Law riders provide coverage between 10% and 50% of your home’s insured value, ample for code-required upgrades.

Protection for High-Value Items

Homeowner policies often limit reimbursement for valuable items like jewelry, collectibles, or electronics. For high-value possessions, additional protection is advisable. A scheduled personal property rider allows listing and protecting individual items at appraised values.

Policies may cap valuable items at low sublimits. Scheduling them provides “all-risk” coverage, covering theft, loss, and accidental damage. Expect premiums of $1–$2 per $100 of insured value. Accurate appraisals every 2–5 years ensure accurate values, and many policies extend coverage worldwide.

Home-Based Business Coverage

Running a business from home often means insufficient policy protection for work-related assets. A business property rider can cover inventory, equipment, or liabilities related to home operations.

Standard policies typically cover only $2,500 of business property inside the home and $500 off-site, inadequate for modern home offices. A rider can increase this coverage to $10,000–$25,000, while a separate policy adds liability coverage, crucial if clients visit your home. Keeping in mind, these riders don’t replace professional liability insurance, so freelancers may require both.

Riders are strategic protections to shield from unexpected costs as inflation, natural disasters, and building requirements change. Reviewing your policy annually and maintaining digital records aids in streamlined claims and can save up to 20% in premiums when bundling policies.

If you're interested in reviewing your coverage for these riders, reach out anytime for a consultation.