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| © Getty Images Young couple with advisor, signing paperwork. |
By Cynthia Paez Bowman, Bankrate
You may not be familiar with the term "insurance endorsement," but you probably have a few if you have car insurance. The easiest way to think about endorsements are as policy modifications. Most states have minimum requirements for car insurance - typically liability coverage that pays for damages to third parties. However, the state minimum may not be enough for your personal insurance needs, especially if you drive a newer model or higher value vehicle.
In some cases, you may even be required to buy additional coverage, such as when you lease or finance your vehicle. A lender will likely require you to purchase full coverage car insurance, which adds both collision and comprehensive coverage. However, you may have other options to build out your policy, such as adding an endorsement like roadside assistance. Below are some other common endorsement offerings.
What is an insurance endorsement?
An insurance endorsement modifies your current policy with options or adjustments to suit your coverage needs. Each insurance company offers its own selection of endorsements.
Insurance endorsements cover the scope of additional modifications and coverage options to personalize an auto insurance policy. Insurance companies and industry professionals may also refer to insurance endorsements as add-ons or policy riders.
Types of insurance endorsements
Insurance endorsements are a good way to change certain terms of the policy without having to cancel or create a new policy to reflect the modifications. Some of the most common categories of insurance endorsements are:
| Endorsement type | Meaning |
|---|---|
| Additional coverage | Optional coverage that can be added to your policy to expand the level of coverage you have. Examples include: Rental reimbursement Key replacement Roadside assistance |
| Exclusion endorsement | Endorsements that restrict your car insurance policy, such as the named driver exclusion, which removes coverage for drivers specifically named to be excluded. |
| Changes to policy details | Notes in writing with any changes to the policy such as driver name, address and more. |
Common car insurance endorsements
Even if you have never heard of the term before, endorsements are more common than you may think. Many insurance policies include one or more endorsements. The following are some of the most common:
Insurance endorsements for vehicle parts
Some vehicle owners make upgrades or modifications to a standard vehicle. These modifications may need an endorsement, especially if they are expensive. Otherwise, they may not be covered in case of a claim. Some of the most common insurance endorsements for vehicle parts are:
- Original equipment manufacturer (OEM): The endorsement allows for reimbursement of repairs using original factory parts, which are typically more expensive than aftermarket parts.
- Custom equipment: Tinted windows, custom wheels and rims or a luxury audio system may be considered custom equipment and could be endorsed to ensure replacement if a covered loss occurs.
- Glass: If your windshield is damaged from road debris or a window is cracked, a glass repair endorsement could provide coverage. Windshield repair coverage often comes with a very low deductible (if any). The endorsement may even include home service, which sends a mobile glass technician to replace or fix a windshield at your location.
Insurance endorsements for new, financed or leased vehicles
As mentioned in the introduction, there are times when you may be required to carry extra coverage, such as when you finance or lease your vehicle. Full coverage may be required to ensure the vehicle is financially accounted for even while not being paid off in full, since the lender's name would be on the title. Some endorsements you may consider adding include:
- New vehicle replacement: If your new vehicle is considered a total loss following a covered accident, this endorsement could pay to replace it with one of the same make and model. New vehicle replacement only available new vehicles up to a set limit, usually under one to two years or less than 15,000 miles.
- Commercial use If you ever use your vehicle for business purposes, this coverage could be useful in ensuring you are covered in accidents. If your vehicle is owned or strictly used for business purposes, a separate business auto insurance policy may be more beneficial.
- Gap insurance: This option kicks in to pay the difference between what you owe on the vehicle and what the insurance company pays you if the vehicle is declared a total loss.
Specialty car insurance endorsements
Some endorsements are based on the type of vehicle or special coverage circumstances.
- Antique car: Classic or antique vehicles that have uniquely high values or require specialized vehicle repairs may benefit from a policy endorsement. The value of the endorsement may need to be determined through professional appraisal.
- Import: Vehicles imported from other countries may require a special endorsement if they were not purchased from a local dealer and were sent by the owner from another country instead.
- Rideshare:
Drivers who work as a driver or delivery person for services such as
Uber, Lyft or Postmates could benefit from special car insurance for
when they are using their vehicle "on the clock."
How much do insurance endorsements cost?
Car insurance endorsements could add to the cost of a basic car insurance policy. Exclusion endorsements or modifications to a policy do not cost extra. However, endorsements that add coverage typically come with a cost. Many endorsements such as roadside assistance or collision damage waiver have minimal charges of a few dollars per month. While each add-on is priced depending on the extent of coverage it adds, endorsements are usually low cost compared to your policy, as the added coverage is usually very specific.
How to purchase an insurance endorsement
Purchasing an insurance endorsement is typically simple and can be handled online, over the phone with your car insurance company or agent or by visiting your local agent's office. To buy an endorsement, you could follow these steps:
- Research the type of endorsement you are interested in: Many endorsements are published on insurance companies' websites. Be sure to read the terms and conditions to understand if there are eligibility requirements or limitations to the endorsement.
- Find out how much the endorsement will cost: In the case of an insurance add-on, such as a gap or rideshare insurance, you may need to call the carrier or agent to find out how much it will cost to add the optional coverage.
- Request the endorsement: Depending on the insurance company, you may be able to add the endorsement online or through the mobile app. Otherwise, contact your agent or a representative to add the endorsement.
- Verify:
Once you add the endorsement, verify that it appears on your policy and
the information is correct. If you find any errors or omissions, reach
out to your carrier right away to correct it.
