Talking With Insurance Companies

Purchasing homeowner's insurance is something you must do if you buy a house, but the policy you purchase will be unique, as no two policies are identical. When you buy a policy, the agent might talk to you about endorsements, and here are several things you should know about endorsements when buying homeowner's insurance.

What they are

The best way to understand what endorsements are is by thinking of them as clauses on a homeowner's policy that add extra coverage for a specific purpose. An endorsement is designed to specifically add coverage for one stated item. If anything happens to an item covered through an endorsement, you would receive compensation for the item at the value you insured it for. You may not need to add any endorsements to your policy; however, you should find out if you do, because they are important to have if you need them.

Why you might need them

There are many different reasons for needing endorsements, but a common reason is to protect valuable items that would not otherwise be covered on a typical policy. An example of this would be a gun collection you own, or an art collection that is extremely valuable. If you have items of high value, your insurance company would not compensate you fully for these items if they were destroyed unless you had endorsements for them. Suppose you have 10 different types of collections at your house that are all valuable. In this case, you would need to add 10 separate endorsements to your policy if you wanted to have protection over all these things.

How they affect your rates

With insurance, you pay for what you get. In other words, a policy that covers very little will typically be less expensive than a policy that offers a lot of coverage. When you add an endorsement to your policy, you will have to pay for it. The actual cost of adding the endorsement will vary, but you should realize that every endorsement you add could result in higher premiums. Generally, though, endorsement costs are not overly expensive. They may be just a few extra dollars per month for each one.

You can add as many endorsements as you would like to your homeowner's insurance policy, but you do not have to add any if you do not want to. To learn more, talk to a company like Bishop Insurance Agency.