What Is an Insurance Rider?

An insurance rider is an add-on to your regular insurance policy. It lets you pick and choose extra coverage for specific things you want more protection for. If you’re looking for ways to make your insurance policy work harder for you, read on to learn how insurance riders work and whether they fit your needs.

Benefits of Insurance Riders

Here are the most common benefits of adding riders to your insurance coverage:

• Personalize your coverage: Riders let you customize your policy to your specific needs, covering risks beyond your basic protection.
• Avoid financial catastrophe: Riders help avoid potentially huge costs associated with surprise events.
• Increased coverage limits: If you have treasured family heirlooms or other things you consider higher value, insurance riders act as an extra shield, providing more financial protection.
• Compliance with loan requirements: Sometimes lenders require you to have specific riders to approve you for a loan.
• Peace of mind: Knowing you have comprehensive coverage for potential risks reduces stress.

Life Insurance Riders

Life insurance policies are designed to protect loved ones in the event of the insured person’s death. They’re particularly vital if you have people who rely on you financially. Here are a few of the most common life insurance riders:

• Accelerated death benefit rider: Gives you access to a portion of your death benefit while living if you are terminally ill.
• Waiver of premium rider: Pays your premiums if you become disabled and unable to work.
• Guaranteed insurability rider: You can purchase additional coverage without a medical exam later.
• Term conversion rider: Enables you to convert a term life policy to a permanent life policy later.
• Return of premium rider: Refunds some or all of your premiums if you die from natural causes.
• Level premium rider: Keeps your premium the same even as you age.
• Child term rider: Provides temporary life insurance coverage for your children.
• Family income benefit rider: Gives extra income to your beneficiaries for a set period.
• Accidental death and dismemberment rider: Provides additional benefits if you die or lose limbs in an accident.
• Long-term care rider: Helps cover the costs of long-term care if needed.

Home Insurance Riders

Home insurance riders can provide critical protection for you in many ways. There are a lot of riders out there for home insurance, but here are some of the most common:

• Scheduled personal property: Covers high-value items, such as jewelry, antiques, collectibles or artwork, beyond standard limits.
• Valuable items rider: This is similar to scheduled personal property, but often with a lower coverage limit and larger category (like pricey electronics).
• Identity theft recovery: Provides assistance and financial support in case of identity theft.
• Earthquake: Covers damage caused by earthquakes.
• Flood: Protects against flood damage, but may not include all types of flood expenses.
• Water backup: Covers damage caused by backed-up sewer lines or drains.
• Pet liability: This covers medical expenses or legal fees if your pet injures someone else.
• Homebased business insurance: Covers equipment and injuries for business run out of your home.

Auto Insurance Riders

If you drive and operate a vehicle, you’ll likely need car insurance coverage. Here are some standard auto insurance riders to consider:

• Guaranteed asset protection (gap): If you total your car or it’s stolen, a gap insurance rider helps pay off the auto loan.
• Accident forgiveness: Ensures that if you cause an accident, your car insurance rate won’t increase.
• Roadside assistance coverage: Covers costs like towing when your car breaks down.
• Rideshare coverage: If you work for a rideshare service like Uber or Lyft, this rider acts like a bridge, filling in the gaps between your personal car insurance and what the rideshare company offers when you’re working.

How to Add Riders to Your Policy

While some insurance companies include a few common riders for free, most riders come at an additional cost. So before requesting a rider from your insurance company, take stock of your needs, lifestyle and budget. After that, the process is pretty simple:

1. Research available riders: Contact your insurance agent or review your policy documents to understand the riders available for your specific policy type. Research each rider’s benefits, limitations (some have eligibility requirements) and costs.
2. Get organized: Be prepared to answer questions about your circumstances and risk factors. For example, you might need to undergo a medical exam or the insurer might want to know the value of your belongings if you plan on covering them.
3. Contact your insurance agent: Get in touch with your insurance agent so they can give you more details, do the math on the additional premium cost and guide you through the application process.
4. Review and approve coverage: Look at the rider application or endorsement form carefully and make sure all the information is correct. Once it’s submitted, your agent will handle the approval process with the insurance company.
5. Pay the additional premium: After approval, pay the additional premium for the rider(s). Look for confirmation from your agent that the rider has been officially added to your policy.

The Bottom Line

Insurance policies for your life, home or car cover certain things, but sometimes you need a bit more. Insurance riders can help you protect what you care about by customizing your coverage. If you decide to add on insurance riders, consider your needs, shop around and compare rider options from different insurance companies to find the best value. Then, rest easy knowing you’ve made strides to protect your financial future.