What is a car insurance endorsement?
A car insurance endorsement — or rider — is a modification or addition to your insurance policy that alters your coverage to more specifically meet your needs. Along with standard coverage options like comprehensive, collision, and uninsured/underinsured motorist coverage, most insurance companies offer coverage endorsements that allow you to customize your policy in areas where your original policy may not have been sufficient.
You have a lot of choices when it comes to your auto insurance policy. While some drivers simply want to meet state-mandated liability coverage minimums, others opt for more robust protections against every conceivable peril (cause of loss). The availability of some types of additional coverage can vary by state and by company. Read on to discover what these extra coverages can do for you and learn more about common insurance add-ons.
Common car insurance endorsements
While car insurance companies vary in the types of endorsements they offer, policyholders most often find the following types of endorsements available as add-ons to their original policy.
If you make changes to your vehicle, you’ll need to make changes to your insurance coverage as well. This ensures your custom parts and equipment (stereos, performance updates, mobility modifications, etc.) are covered.
If you own a classic car, a typical car insurance policy is not likely to provide the coverage you need. Unlike coverage for new cars, classic car coverage allows you to cover your vehicle at its stated value, which is often much more than its actual cash value.
This coverage offers reimbursement for the cost of a rental car or other forms of transportation should your insured vehicle need repairs. You can check your policy for any coverage limits that may apply.
If your vehicle breaks down, this coverage can help with towing and other expenses you may incur.
Your pets are not always covered under typical car insurance. While some companies may cover pets through collision coverage, other auto insurers may offer options specifically for your pets that can cover their medical expenses in the event of an accident.
Miscellaneous type vehicle endorsement
Endorsements for new or financed cars
The following endorsements are designed to protect you against your car’s depreciating value. Not all companies offer such policies, so it’s a good idea to shop around when looking for coverage.
Cars are among the most expensive purchases many people make. Because of this, most people choose to finance their vehicles. However, a car’s value depreciates quickly. If an accident renders your car a total loss, typical collision and comprehensive coverage would only cover the current value of the vehicle, which can be quite a bit less than the amount that you owe. Gap coverage steps in to help with the difference.
New cars lose value as soon as you drive off the lot. Should your new car be declared a total loss, this coverage pays to replace the vehicle with a brand new one of the same make and model. This helps you to avoid taking a financial hit due to your car’s depreciation.
Gap coverage can help cover the difference between what your insurance would pay and what is owed on the car, if it were a total loss.
Endorsements for business, rideshare or delivery drivers
Your personal auto insurance policy does not provide coverage when your car is being used for business purposes such as deliveries or ridesharing. Some auto insurers may allow this coverage to be added through endorsement. In some cases, it may require you to switch to a new policy altogether.
While many rideshare companies offer insurance to their drivers, it often leaves gaps in coverage. For many insurance companies, rideshare insurance is technically a different product than your personal policy. It is a hybrid of personal and commercial insurance that covers you for companies like Lyft or Uber as well as others. This coverage often does not limit you to one rideshare or delivery company, but allows you to drive for multiple companies.
If you use your car for business purposes, your personal auto policy can fall short in the event of an accident. In some cases, it can even be voided altogether. Whether you use your vehicle for delivering pizza or otherwise, you will want to add commercial use coverage to ensure that accidents are covered while your car is being used for business purposes.
Commercial insurance endorsements may be available. In most cases, however, a business owner may be better off with a commercial auto policy. Commercial auto insurance can better protect vehicles that are owned by your business or used for business use.
What to consider when looking for car insurance endorsements
Every insurance provider offers its own specific endorsement options. A good place to start is to check your policy documents — especially the declarations page of your insurance policy — to see what general insurance coverages you currently have. If you are uncertain if you have enough coverage, reach out to an agent or representative from your current insurer to see which endorsements work pair well with your existing policy.
It could also be worth searching for a new policy, as they can vary widely in cost and depth of coverage. If you’re looking for competitive auto quotes, The Zebra can help.
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About The Zebra
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