The Importance of Endorsements.

It should be noted that home insurance policies, or any type of property coverage for that matter, was originally formed as a financial protection against fire. In previous generations, the greatest catastrophic risk to your structure was indeed an uncontrolled blaze.

Looking to modern day insurance, the basic concept of today’s policy, and the way it’s structured, remain the same – it’s a fire policy. Albeit there have been additional coverages added to the wordings since its inception, but the fact remains that its change has been nominal.

With this in mind, we want to consider endorsements, and discuss what they are, why they were created, and how to add them to the contract.

So, what is an endorsement? It’s actually very simple. It’s a change to the policy, which either adds or deletes coverage. An endorsement can include exclusions (normally inserted by the underwriter), and additions (normally inserted by the insured for additional premium). A common exclusion from the insurer might be related to asbestos, where the policyholder’s addition might more related to water damages.

Easy right? But the question remains: why they are necessary?

If we think about all the different properties out there, personal or commercial, we can agree that no two are exactly the same. There are so many things that differentiate the risk of a structure, such as: building products, year of construction, the use of the property, size, location, historical claims, etc. Therefore, it’s important for underwriters to offer coverage they are comfortable with by using endorsements, and for consumers to ‘beef up’ their policies by doing the same.

In insurance, there are important endorsements every policyholder should be made aware of, since the base ‘fire’ policy does not include them. The three most common additions to coverage are earthquake, flood, and high-value jewelry.

It’s important to chat with your insurance broker and make sure that your current property policy ticks all the boxes that you need it to.

To learn more about Alteri, and why you should consider us for your next policy, click here.