What Is an Insurance Rider, Endorsement and Floater?

An insurance rider is a slight tweak to your policy that allows you to increase the overall coverage of your home insurance for specific categories. When you add a rider to your policy, you essentially purchase additional coverage for category items, such as a collection of jewelry or drain backup.

By simply adding a rider, you can effectively make changes to parts of your home insurance policy without having to cancel your current policy and get another one.

An insurance policy endorsement is the exact same thing as a rider. It’s just another word for it. The two terms, endorsement and rider, are used interchangeably and are simply an increase or all new coverage in specific categories that don’t come standard with an average home insurance policy.

For instance, many home insurance policies don’t come standard with sewer and drain backup coverage. Not to worry, in most cases, there’s an endorsement for that!

All you need to do is add a policy endorsement or rider to your policy to increase coverage limits on certain categories or extend coverage to specific categories you don’t currently have.

An insurance floater is similar to endorsements and riders, with one exception. Instead of increasing or extending coverage to certain categories, floaters increase or extend coverage to specific items. Jewelry and furs are among some of the most popular items that are attached to floaters.

Let’s go through an example. A policyholder has a $2,000 limit on jewelry coverage but owns $5,000 worth of jewelry. They’re currently underinsured by $3,000. Let’s assume that own a $1,500 gold necklace and a $1,500 diamond ring.

They can then add two floaters to their policy to extend coverage to each item, which may be just a small fee added to their premium each year. This means they just added coverage to their current policy instead of having to cancel their policy and get a new one.

Personal property floaters get their name because policyholders essentially float coverage to a specific item. This allows them to modify their existing home insurance policy instead of having to secure a new home insurance policy.