Endorsements vs. Floaters: Tailoring Your Home Insurance Coverage

Standard **home insurance** policies (HO-3 form) offer broad protection, but they have limitations on specific risks and valuables. To close these gaps, consumers can use two primary tools: **Insurance Endorsements** (or riders) and Floater Policies. Understanding the difference helps you customize your coverage effectively.

1. Insurance Endorsements (Riders)

An endorsement is an addition or change made to the basic policy contract. It modifies the existing coverage by either adding coverage for a previously excluded peril or increasing limits on standard coverage.

Common Examples of Endorsements:

Water Backup Coverage: Adds protection for sewer or drain backups, which are usually excluded.
**Identity Theft Restoration:** Adds limited coverage for identity fraud recovery costs (Article 18).
**Increased Limits:** Raises the standard sub-limits on items like firearms or electronic data.

2. Floater Policies (Scheduled Personal Property)

A **Floater Policy** (or Personal Articles Policy, Article 22) is essentially a separate policy that “floats” above your standard limits. It is used exclusively for high-value items, offering broader protection than an endorsement.

Key Benefits of a Floater:

**”All Risk” Coverage:** Often covers “mysterious disappearance,” a peril excluded from standard policies.
**Agreed Value Payout:** Payouts are based on an agreed appraisal value, not the insurer’s depreciation schedule.

The Distinction: An **endorsement** tweaks the rules of the main policy; a **floater** moves the item entirely out from under the main policy’s restrictions, giving it superior, dedicated coverage.

To ensure total protection, homeowners should review their policy annually and use the appropriate combination of **insurance endorsements** and floaters to tailor coverage to their specific assets and risks.