Should You Get a Rider on Your Homeowners Insurance?

Here's how riders work and whether one might benefit you.

The purpose of putting a homeowners insurance policy in place is to buy yourself protection in the event of property damage or an injury that occurs on your property. Plus, homeowners insurance is something that mortgage lenders generally require before they close on your loan.

When you buy homeowners insurance, your policy should spell out, in detail, exactly what sort of coverage it entitles you to. But in some cases, it can make sense to buy extra protection in the form of a rider.

How riders on insurance policies work

A rider is basically an add-on to an existing insurance policy that buys homeowners extra protection for specific items. Most insurance companies strive to keep their premium rates as reasonable as possible. To do so, they typically offer basic coverage for personal belongings that are damaged or stolen. That coverage, however, may not cover the entire cost of specific valuables.

Take jewelry, for example. A given homeowners insurance policy may have a limit of $1,000 for jewelry. That, in turn, keeps the cost of that policy at a reasonable price point for the average property owner.

For some people, that $1,000 may be enough coverage. A homeowner whose entire jewelry collection is only worth $2,000 may not feel the need to insure individual pieces. But for others, it may fall short. Someone who owns an $8,000 ring, for example, may not be satisfied with the idea of getting reimbursed $1,000 for that piece if it's damaged or stolen. In that case, getting a rider added onto an insurance policy could be a good idea.

How to know if getting a rider makes sense

Whether it makes sense for homeowners to get a rider on their insurance depends on two factors:

• The level of coverage they already get through their policy
• The number of valuables they own that aren't subject to full coverage

Homeowners who are not sure if getting a rider is worth it should find out what is included in their existing coverage and then assess their valuables to see how that coverage aligns with what they're worth. Homeowners should pay particular attention to things like jewelry, artwork, and antiques, whose value may not be completely obvious at first glance. In fact, some homeowners make a point to have their valuables appraised to see how much insurance coverage they need for those items specifically.

The cost of a rider will depend on the item a homeowner is looking to insure and the rate their insurance company quotes them. Once homeowners have that information, they can weigh the expense of paying for that rider against the expense of potentially having to replace a damaged or stolen valuable.

Ultimately, getting a rider on an insurance policy can be a smart move for homeowners, but it's not a necessary expense for everyone. Getting a rider can give many homeowners peace of mind, so that alone may be worth the cost.