Renters Insurance Endorsements And Floaters

Like homeowners insurance, most renters insurance policies have exclusions that limit what's covered. By adding endorsements and floaters, tenants can make sure their renters insurance offers adequate coverage. Here's what renters should understand about policy limits, endorsements and floaters when shopping for a policy.

Endorsement vs. scheduled floater

What is an endorsement? Endorsements (also called riders or options) allow a policyholder to raise the claim limit on a specific category, such as jewelry or sporting equipment. It is effectively purchasing additional coverage for personal property that the insurance company views as unusually valuable.

What is a scheduled floater? A scheduled item, sometimes called a "floater" policy, extends coverage for a specific item or collection instead of an entire category. If the value of one of your belongings exceeds its category limit, then it's a good candidate for scheduling. Floaters also tend to provide more comprehensive coverage, including accidental loss, which a standard renters insurance policy would not cover.

One thing to note: Endorsements or riders are generally cheaper than scheduled floaters, because they typically only increase the limit of one category.

Types of endorsements and scheduled floater policies

Insurance companies typically offer a set of basic riders, and in most cases, single items within any of the categories can be scheduled and covered with a floater policy.

Sewer and drain backup: A backed-up sewer or drain can cause significant damage to a home and personal property. Your landlord might purchase a sump pump to prevent overflow, but if you don't tend to the system, you could be responsible for any damage it causes to the property. Renters are also responsible for their own personal property, which could be damaged in a water backup.

Even the top insurance companies frequently exclude this coverage from renters and homeowners insurance policies. It's also not covered by flood insurance, so adding an endorsement is a good way to protect personal property near the pump.

Adding the sewer and drain endorsement can cost about $120 to $250 per year. But if there is a sump pump in a building with multiple units, the landlord or superintendent should be responsible for it, and you, as a tenant, would have no need for this endorsement.

Jewelry, furs and similar valuables: Because jewelry, furs, watches and other high-value items can be stolen easily or lost to a covered peril, most policies have an overall claim limit between $1,000 and $2,000. Considering jewelry alone, a $2,000 limit is not very high. If the total value of your items in this category exceeds your overall limit, then you should purchase an endorsement. Remember that policies have per-item limits as well, so if one of your items exceeds the overall claim limit, you should cover it with a floater policy.

Electronic equipment: Televisions, stereo systems and video game consoles are all examples of property that falls under this category. The claim limit for electronic equipment is not always a set dollar amount but instead based on a percentage of the main policy's coverage — usually up to 10% of the total personal property limit.

Sports equipment and musical instruments: Sports equipment and musical instruments have per-item and overall claim limits, typically ranging from $500 to $2,000. You should consider whether any of your belongings fall into this category. A bucket of baseballs or a harmonica probably aren't worth paying the deductible, but one set of golf clubs or a piano could easily be valued well beyond the standard limit of a renters policy.

Collections: This category typically includes memorabilia, such as baseball cards, comic books and album covers. Policyholders must have the collection valued by an appraiser for the stated value to be covered. The limit you choose should cover the total value of everything within the category, because a fire or other peril would likely affect the entire collection.

Earthquakes: A basic renters insurance policy doesn't protect personal property damaged by an earthquake, but policyholders can add an earthquake endorsement. This endorsement will most likely not cover sinkholes or any damage to land, including large cracks or holes that appear on the property. If your renters insurance company doesn't offer an earthquake endorsement, you may purchase a separate earthquake insurance policy from a different company.

Sinkholes: This endorsement covers direct physical loss or damage to insured property caused by "sudden settlement," including sinkholes. Renters insurance policies sometimes cover "catastrophic ground cover collapse," but the event might have to meet a stringent list of criteria to qualify for coverage.

A sinkhole endorsement effectively covers sinkholes that don't meet all criteria for renters policies and are excluded by earthquake insurance. Sinkholes are rare, but some states, such as Florida, are more susceptible to them than other states. Anyone who lives in an area with a history of sinkholes should consider purchasing this endorsement.

If your insurance company doesn't offer a sinkhole endorsement, you may purchase a stand-alone sinkhole insurance policy.

Identity theft: This type of coverage protects you against crimes related to identity theft. Some renters insurance policies include some coverage for identity theft, but an endorsement can increase the limit. These policies are growing in popularity as the number of identity theft crimes increases. Javelin Strategy & Research found that more than 15.4 million adults in the US had been victims of some form of identity theft in 2022, with over $40 billion in losses, collectively.

Assisted living care: Few insurance companies offer this special coverage because of how infrequently it's used. For that reason, it is not coverage most people need (and some companies may only offer as an add-on to a homeowners policy). It covers the expenses of an assisted living facility for an individual related to the insured person by either blood, marriage or adoption. The endorsement also provides expense coverage for the relative, up to certain limits, for things including hearing aids, eyeglasses, contact lenses, false teeth or dentures, a medical alert device, walking aids and wheelchairs while they are staying at the facility. It does not cover hospice care.

Boats and other watercraft: Once they are on the water or not on the premises of the policyholder's residence, boats and other watercraft are not usually protected. Watercraft are also sometimes excluded from renters policies, which is why this endorsement exists. It typically provides liability and medical payments coverage for motor watercraft with over 25 total horsepower and sailing vessels longer than 26 feet.

Refrigerated property: This coverage protects the contents of freezers and refrigerators in the event electrical service to a device is interrupted by damage to the power transmitter (on or off premises) or mechanical failure. The endorsement usually has a low limit and a deductible. Unless you're someone who has an unusual number of things stored in freezers or refrigerators, you generally don't need this coverage.

Riders that don't apply to renters

Some endorsements cover a category within an insurance policy that doesn't apply to a renter. We've listed some of those and explanations below.

Inflation guard: This type of endorsement automatically increases the coverage limit on a home periodically to account for inflation. Because renters don't own the dwelling they occupy, there is no need for this endorsement. However, a property owner might want to consider it. In fact, some insurers include this feature in their homeowners insurance policies from the start.

Yard and garden: This coverage increases the claim limit for landscaping and tools, which many renters don't have. Unless you have a garden or are responsible for the home's lawn maintenance, you likely won't need this type of coverage.