Home Owner's/Renter's Insurance Endorsements
Although multiple exclusions are listed above, some of these exclusions can be added to your renters/homeowner's policy as endorsements. An endorsement or rider is a clause added to your policy that adds coverage that was not there previously or which increases your coverage limit. Adding endorsements will add to the cost of your insurance policy. Flood coverage or Earthquake coverage, for example, can typically be added as endorsements to a homeowner's policy. In hurricane prone areas you may need to purchase separate wind coverage. Other types of endorsements include:
Replacement cost coverage, which will cover the entire cost to replace any lost items (such as when you need to rebuild your home), even if the originals items are of less value than new replacements.
Inflation fighter, which automatically increases your coverage so that it keeps up with inflation.
Scheduled personal property, which enables you to insure specific high value items like jewelry, furs, stamps, coins, or other items that exceed normal policy limits on the replacement value of individual items in a regular homeowner's policy. With an endorsement for a diamond ring in place, you would be compensated for the value of the ring in the event it was stolen. Without the endorsement in place, you would be compensated at a much reduced rate which would not recognize the actual value of the ring.
Although renter's/homeowners insurance is designed to cover a loss, there are times when it is not wise to file a claim. If your deductible is almost as high as the cost to repair/replace the item, for example, you are better off not filing a claim. If you have had several claims in the past several years, you would also want to carefully consider filing additional claims. The reason for this is that every time you file a claim, you appear to represent an increased risk to the insurance company going forward. The insurance company is allowed to cancel your policy if it starts to believe that you present too great of a risk. Filing claims regularly will increase the likelihood that they will simply not renew your policy at some time in the future.
Most States have a (Co-insurance) law requiring that if you wish to have the insurance company pay up to the full insured values that you insure at least 80% of the value of your home. For example: If your home is valued at $200,000 and your policy covers only $160,000 (80%), the company will pay you 100% of the loss up to the insured value. If in the same example you have only $100,000 of coverage on a $200,000 home, or 50% of the value, and you have a loss of $100,000 the insurance company will only pay you 50% of the loss or $50,000 instead of the $100,000 you though you were going to get. You don't want to be in that situation! It is imperative that you annually update your coverages to make sure you insure at least 80% of the replacement cost for your home.