Car insurance policies come in various forms, with most focusing on the standard coverage types that most people are familiar with. That includes liability coverage for bodily injury and property damage, collision coverage and comprehensive coverage. Although these are some of the best-known types of auto coverage available, many carriers will allow policyholders to further customize their coverage options with car insurance endorsements—at a cost. We’ll talk you through what an insurance endorsement is and how it works so you can build the coverage package that’s right for you.
What is an insurance endorsement?
An endorsement in insurance modifies your policy in specific ways, depending on what you select. Generally, endorsements add to your coverage limits or types, but they can also be used for several other purposes. You can think of endorsements as policy customization tools that can be used, depending on the auto insurance carrier, in a wide range of ways to alter and modify your car insurance policy. These tools are often also referred to as policy add-ons or riders.
Types of insurance endorsements
An insurance endorsement is a good way to change certain terms of your car insurance policy without having to cancel it or create a new policy to reflect the modifications. Some of the most common categories of insurance endorsements are:
| Endorsement type | Meaning |
|---|---|
| Additional coverage | These types of endorsements can increase coverage limits on your existing coverage types or add entirely new coverage types to your policy. Examples of additional types of coverage include things like rental reimbursement, key replacement and roadside assistance. |
| Exclusion endorsement | These types of endorsements restrict certain facets of your car insurance policy. One example is the named driver exclusion, which removes coverage for drivers specifically named as excluded on your policy. |
| Changes to policy details | These endorsements are simply written notes that detail any changes to your policy, such as a driver’s name or address and more. |
What are mandatory and voluntary endorsements?
Most commonly, car insurance endorsements are voluntary, meaning that the policyholder chooses the rider as opposed to having it required of them. In some cases, however, auto endorsements can be mandatory. For instance, some states require that drivers carry PIP, or similar medical benefits coverage, as part of their minimum coverage auto insurance policy. Similarly, if your car is leased, your lender may require that you have mandatory gap insurance coverage or a similar endorsement.
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. We break down some of the most common types you may have come across.
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Many vehicles are standardized and have few if any modifications, yet others can be highly customized, whether bought that way or modified over time by the driver. With standard cars, a standard auto policy may cover the parts and labor involved. With custom vehicles, however, added endorsements may be necessary before your policy covers the costs of repairs. Some of the most common insurance endorsements for vehicle parts are:
- Original equipment manufacturer (OEM): This type of 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.
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If you have a new vehicle, there are some insurance endorsements you may want to consider. These coverage additions could help with financially covering some of the risks that accompany a new vehicle. For starters, if your car is being financed or leased, you will likely be required to maintain full coverage car insurance, but there are other important endorsements to look at when considering a new vehicle. 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 is only available on certain new vehicles, usually under one to two years or less than 15,000 miles. Your insurance agent will have specific information about your insurance company’s limits.
- Commercial use: If you ever use your vehicle for business purposes, like delivering pizzas, 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:Gap insurance coverage 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.
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New cars aren’t the only type of vehicle to benefit from specialized coverage. Antique vehicles, rarer imports and professional drivers all have unique auto insurance endorsements available to help protect against the financial risk associated with each of these less common vehicle situations.
- 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 for rideshare services such as Uber or Lyft, or food delivery services such as Postmates or DoorDash, could benefit from special car insurance for when they are using their vehicle “on the clock.”
Less common car insurance endorsements
Many of the endorsements discussed above can be found commonly from a wide range of auto insurance carriers. There are, however, less common types of auto insurance endorsement that may be worth seeking out. These options may require finding a specific carrier who will offer them and may come with higher rates. Some less common car insurance endorsements include:
- Pet injury: If your pet is in the car with you when you get into an accident and is injured or killed, this coverage might pay for vet care or funeral costs up to the coverage limits. This should not be confused with pet insurance, which acts like health insurance, covering your pet’s qualifying accidents and injuries.
- In-home care costs coverage: If your injuries are substantial enough that you require in-home care assistance, this endorsement could provide coverage to pay for the cost. In-home care can include help with bathing, dressing, light housekeeping and transportation.
- Better car replacement: If your car is totaled, better car replacement provides compensation for a vehicle one year newer that has 15,000 fewer miles than your car that was totaled. This differs from new car replacement, which gives you the funds for the same make and model that was totaled.
How much do insurance endorsements cost?
The cost of any given car insurance endorsement will vary between auto insurance companies and often between drivers, even if they have a policy from the same company. As with any facet of car insurance, premiums are highly personalized and based on multiple factors. That said, customizing your policy with endorsements that increase or add coverage, like roadside assistance, will almost always increase your premium. Other types of endorsements, like exclusion endorsements, may not impact your rates or may even lower them.
How to purchase an insurance endorsement
Most carriers offer online applications through their websites as well as the option to contact their agents by phone and purchase that way. The option of going to a physical office and applying for your policy is less common these days, but still available through some carriers. Before buying an endorsement, consider 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 to your policy.
- 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 the coverage: Once you add the endorsement, verify that it appears on your policy and that all information is correct. If you find any errors or omissions, reach out to your carrier right away to correct it.
Frequently asked questions
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Some endorsements have deductibles or a fee you have to pay for the service, such as roadside assistance coverage. Whether an endorsement has a deductible depends on the specific endorsement and what coverage it provides or excludes on the policy.
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When you add an endorsement to your insurance policy, it stays valid as long as the policy does, or until it is removed from the policy. If there is a time limit for the endorsement, it should be listed in your policy details. An endorsement can often be renewed with your policy, as long as certain requirements are met. For instance, a new car replacement endorsement may only apply while your car is a certain age or has a particular mileage limit, which means it will be removed once the age or mileage has reached its limit.
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Typically, you can add an endorsement to your insurance policy at any time. The policy can be endorsed when it first begins, at the policy renewal or at any time during the policy period. For example, if your policy renews in April, but you buy a new car in February, you can add the new car and new car replacement endorsement when you buy it in February. If the endorsement still qualifies, the policy would automatically renew with it included.
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Most endorsements are voluntary and are only included with your policy if you want or require it. However, in the instance of an excluded driver endorsement, these are usually mandatory if requested by the insurer. The insurance company is giving you the option to either name the driver as an excluded driver or have your policy canceled or nonrenewed.
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