Important home insurance riders you may be overlooking

Most homeowners feel confident that their insurance will step in when something goes wrong. Unfortunately, many only learn after filing a claim that their policy doesn’t cover some of the most expensive risks. Optional add-ons—often called riders, endorsements, or floaters—are easy to miss but can make a major difference when unexpected damage occurs.

As natural disasters become more common and homes get older, these add-ons have become increasingly valuable. Flooding now plays a role in the majority of U.S. natural disasters, code requirements continue to tighten, and even minor ground movement can cause structural issues a basic policy may not cover. With more households relying on high-value items and home-based work, reviewing coverage every year is one of the smartest financial protection steps you can take.

Below are several riders worth considering and why they can make a meaningful impact on your peace of mind.

1. Flood insurance and water-related damage

Traditional homeowners insurance usually excludes damage caused by exterior flooding or water issues that aren’t sudden or accidental. If your home is near an area prone to flooding, a separate flood insurance policy is often essential—and in some cases required. But with severe weather events affecting more regions than ever, homeowners outside designated high‑risk zones also face significant exposure.

A water‑backup rider provides extra protection for issues like sewer backup, sump‑pump overflow, and groundwater seepage. These problems often fall into a different category than surface-level flooding, so it’s important to know exactly how your insurer defines each type of water damage.

Flood policies through FEMA’s National Flood Insurance Program (NFIP) average around $899 per year and typically offer up to $250,000 in structural coverage and $100,000 for personal belongings. Private insurers may provide higher limits and quicker claim processing—an advantage in areas where rebuilding costs exceed NFIP caps. And because roughly one‑third of flood claims happen outside high‑risk zones, many homeowners are vulnerable without even realizing it.

Water‑backup riders generally range from $50–$250 annually and often include $5,000–$25,000 in protection. Adding preventative features such as backflow valves or a battery‑powered sump pump may qualify you for small discounts on your premium.

2. Earthquake and seismic protection

Earthquake damage is rarely covered under a standard policy unless you’ve added specific seismic protection. Homeowners in earthquake‑prone regions typically need this type of coverage, but even those in lower‑risk zones aren’t immune to ground shifting or tremors that can damage plumbing, foundations, or structural supports. A seismic rider offers an added layer of financial security.

Many major carriers offer this coverage as an add‑on or standalone policy, particularly in states like California, Washington, and Oregon, as well as certain Midwestern areas. Deductibles often run between 2% and 20% of your home’s insured value—meaning a $500,000 home could carry a $50,000–$100,000 deductible. While this may sound steep, the cost of repairing major structural issues can exceed that amount quickly.

These endorsements often include benefits like emergency repairs and debris removal, which can help reduce immediate recovery costs after a seismic event.

3. Building code and ordinance upgrades

When your home is repaired or rebuilt after damage, it must meet current building codes—even if it was originally constructed under older standards. Without additional coverage, you may be responsible for paying out‑of‑pocket for these code-required updates. A building code or ordinance rider helps cover those costs.

Modern codes evolve frequently, especially regarding electrical work, plumbing, insulation, HVAC efficiency, and structural stability. These updates can increase the cost of rebuilding by 10%–20%, and standard homeowners policies typically don’t account for that increase. Ordinance or Law riders usually offer an additional 10%, 25%, or 50% of your dwelling limit for these upgrades.

Even a small fire in a single room can trigger broader code compliance updates throughout the home, including areas that weren’t damaged. Ask your agent whether your policy includes coverage for “increased cost of construction” to ensure you’re protected from these unexpected expenses.

4. Scheduled personal property for valuable items

Most homeowners policies put limits on how much you can claim for high‑value belongings like jewelry, collectibles, and certain electronics. If you keep valuable items at home, a scheduled personal property rider allows you to list and insure each piece at its appraised value.

Standard policies often cap coverage for valuables at relatively low amounts—for example, $1,500 per jewelry item or total caps for categories like firearms or silverware. Scheduling these items gives you broader “all‑risk” protection, including coverage for loss, theft, and accidental damage.

Expect premiums around $1–$2 per $100 of insured value, which comes out to about $200 per year for $10,000 in jewelry. It’s a good idea to update appraisals every few years to maintain accurate coverage amounts. Some policies even extend protection while you’re traveling. Using a home-inventory app to store receipts, serial numbers, and photos can help make claims smoother and faster.

5. Protection for home‑based businesses

If you run a business from your home, or even if you store work-related equipment there, your current policy may not offer enough protection. A home business or business property rider can extend coverage for inventory, equipment, and liabilities tied to your operations.

Standard homeowners policies typically include only $2,500 in business property coverage inside the home and $500 outside it—far less than most people have in today’s home offices. Riders can raise that limit to $10,000–$25,000, while separate home business policies can add liability protection if clients or contractors visit your home.

Since many insurers have updated policies since 2020 to exclude remote‑work equipment unless specifically added to the policy, a rider may be essential for anyone working from home. Additional coverage options include business interruption protection, cyber coverage, and inventory protection for people who sell physical products.

Final thoughts

Riders aren’t just optional extras—they’re important tools that help protect you from large, unexpected expenses. As weather patterns, building requirements, and home values evolve, endorsements help ensure your coverage keeps pace with real‑world risks.

Be sure to review your policy each year, especially after renovations, major purchases, or life changes. Keeping digital copies of receipts, photos, and inventory lists can streamline future claims, and bundling policies may help reduce premiums by up to 20%.

If you’d like help reviewing your coverage or exploring which riders might strengthen your protection, feel free to reach out anytime.