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Auto Insurance Endorsement
There are many scenarios in which your car insurance needs or your budget may change, requiring you to change your existing policy. Luckily, insurance endorsements allow you to do just that.
What Is an Insurance Endorsement?
An insurance endorsement is essentially any change made to your existing auto insurance policy. It can either:
- Expand coverage.
- Restrict coverage.
If you get an endorsement, expect your premium to change. If you expand your coverage, you are likely to see higher rates. On the other hand, restrictions, such as exclusions, can get you cheaper rates.
When Are Endorsements Written?
Endorsements can be written at any time, for any reason. You might find you need an endorsement to your auto insurance policy if:
- You have a life change:
- Example: If you recently bought a new vehicle, you may decide to amend your policy to include gap coverage, which will pay the difference between your loan amount and the actual cash value of your vehicle after an accident.
- You are traveling.
- Example: You may decide you need rental car coverage and request it to be added to your policy.
- You have a shift in your budget.
- If times tighten, you may need to decrease your coverage or exclude high-risk drivers from your policy. Conversely, if you begin making more money, you may choose to get that coverage you’ve been wanting.
Once an insurance endorsement is made, you should receive a new declarations page that includes the details of your policy changes.
Types of Endorsements
Since there are so many types of auto insurance endorsements, you can really customize your policy to suit your lifestyle and needs. The following list includes common endorsements offered by car insurance companies to expand your coverage:
- Roadside assistance in case your car requires repair.
- Towing and labor coverage to tow your car to an auto repair shop if it breaks down.
- Rental reimbursement coverage to help pay for the cost of a rental car while yours is being repaired.
- Gap coverage, which pays the gap between the remaining amount on your loan and the actual cash value of your vehicle at the time of an accident. Home care services, so your insurance company will cover the costs of certain household expenses up to a specified dollar amount.
- Custom parts and equipment coverage to pay for the cost of damage to aftermarket equipment/custom parts you’ve installed in your car.
Note that the above does not encompass all available endorsements. If you’re looking to expand your coverage, speak with your auto insurance agent about what is available.
Also note that endorsements can restrict your coverage as well.
Let’s say, for example, your roommate has a poor driving record and is driving your premium up. You can choose to exclude him from your policy to get cheaper rates.
You can also choose to raise or lower your deductible, which will generally have the reverse effect on your premium. For example, electing a higher deductible will usually get you a lower premium.
Requesting Changes to Your Policy
You can contact your auto insurance agent to inquire about changes to your policy.
When you request changes to your policy, be sure to find out how much you will be charged if you’re getting your coverage expanded, or how much you can save if the new endorsement restricts coverage.
Before you decide to amend your current policy, investigate the policies that other car insurance companies offer. You might find you can create a comprehensive policy with another insurance and pay less than you would after making the change to your policy.
Switching companies might end up being your best option, but it depends on your specific case. Make sure you get several car insurance quotes before deciding to switch to another company.