When you’re buying a home, you already know that you’ll need homeowner’s insurance, but you should know that it may not cover everything you have of value. Some belongings require a rider, which is a separate policy that serves as an extension of your hazard insurance to include certain valuables. A rider can also increase the coverage you already have for damages to certain possessions or in the event of a disaster.
What do you need and how much coverage should you have? To find out what’s right for you, make an extensive inventory of your possessions and then compare them to the coverage offered in the homeowners insurance policy that you plan to buy.
According to Homeownersinsurance.org, here are some examples of when you’ll need a rider in addition to your property hazard insurance.
You have a home office. The maximum payout for most office equipment and furniture is $1,000 or less, so if you have valuable equipment and furniture, you’ll need a rider. Also, if you see clients or vendors in your home, they won’t be covered if there is an accident and they were there to do business.
You own fine jewelry. Hazard insurance may have limits on what it will pay out for jewelry, so if you have heirlooms or personal jewelry valued at more than $2000, you should ask your homeowners insurance agent about a jewelry rider.
You own fine art, rugs, antiques or collectibles. The limit to coverage on expensive furnishings is between 50 and 75 percent of the value of the homeowners policy. You need additional coverage at the market value of your collection.
Your home is located in a flooding or earthquake prone area. Flooding and earthquakes are not covered under standard homeowners insurance policies. If you know your new home is in a hazardous zone, you should talk to your insurance agent about additional coverage. Contact Fema.gov for information on the National Flood Insurance Program. You may qualify for help insuring your new home.
The best thing about having homeowner’s insurance is peace of mind, and with the right rider in place, you’ll be sure to be worry-free.