Published: March 2, 2023Last updated: March 22, 2023

Insurance Endorsements for Cars

How changes in car insurance can affect your bottom line

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A change made to a car insurance policy is known as an insurance endorsement. Of course, not all endorsements are equal; some may increase the cost of your insurance, and others may decrease it. Plus, endorsements can be for a variety of services, from roadside assistance to rideshare coverage.

While endorsements are a standard part of any insurance policy, we’ll explore how they apply to car insurance policies specifically.

What Is an Insurance Endorsement?

An insurance endorsement is any change to an insurance policy that adjusts the policyholder’s coverage. Insurance endorsements can include the following types of changes:

  • Additional coverage, like adding coverage that is otherwise excluded from the policy
  • Exclusions, such as excluding certain claim types
  • Modifications of coverage, like expanding the scope of the existing coverage1

NOTE:

Another word for an insurance endorsement is “rider.”

How Insurance Endorsements Work

You can seek endorsements when you purchase your policy, when you’re in the middle of the term, or when you renew your policy. Once the change is made, the endorsement is an official part of your insurance plan and guides your coverage accordingly going forward.

How Long Endorsements Are Valid

Whenever you add endorsements, they’re in effect for the remainder of your policy’s term

Common Insurance Endorsements

  • New-car replacement: Did you buy a new car? If so, consider adding new-car replacement coverage, which would get you a car of the same or similar make, model, and year if you total the vehicle. Or, it could provide you with a specific dollar amount to replace the car yourself.
  • Gap coverage: For loaned or leased vehicles, gap coverage will cover the remaining amount on a loan if you’ve totaled your car. Most lenders and lessors require gap insurance.
  • Rental car coverage: Rental car coverage provides you with a rental car if your car is being repaired under a covered claim.
  • Rate lock: Rate lock is a protection that says your rate won’t rise if you meet certain conditions in a given time period, like not causing any car accidents.
  • Diminishing deductible: A diminishing deductible means you’ll pay less and less for your deductible each year you go without an accident or claim, depending on the insurance provider. With some companies, the deductible can go all the way down to $0.2
  • Commercial insurance: You’ll need separate coverage if you drive for commercial reasons, such as for a rideshare service like Uber or a food delivery service like Grubhub. Regular personal auto insurance policies don’t apply to any commercial driving, so make sure you’re covered properly with this endorsement.

FYI:

A rideshare company’s insurance does not always cover the driver. It applies only when passengers are in the car, not when the driver is traveling to pick up riders or waiting to get matched.

  • Extra equipment: Have you added a stereo, navigation system, permanently installed cell phone, or custom wheels to your car? Add an endorsement to cover these aftermarket parts.3
  • Roadside assistance: Many insurance providers offer roadside assistance, which usually includes access to towing, locksmiths, fuel delivery, and jump starts.
  • Name or ownership transfer: Did you have to get a new car title? You’ll need to let your insurance provider know so they can alter your policy.
  • Change in contact or vehicle information: You should tell your insurer about any change to your engine and chassis number, registration number, name, address, car variant, vehicle make or model, fuel type, and more. When in doubt, let your agent know of any car-related change, and they can confirm whether an endorsement is necessary.

How Much Insurance Endorsements Cost

How Endorsements Affect Premiums

The cost of insurance endorsements depends heavily on what type of endorsement you’re adding to your existing insurance policy. For example, adding roadside assistance from Allstate is only $8 a month, while gap insurance similarly costs only a few dollars per month. An endorsement’s effect on your premium also depends on whether you’re adding coverage, excluding coverage, or modifying coverage. Obviously, adding more coverage will cause premiums to increase and vice versa.

Do Endorsements Have Deductibles?

Typically, the only coverages that require insurance deductibles are collision and comprehensive coverage, which cover your property damages in both collisions and non-collisions.

How to Get an Endorsement

  1. Contact your insurance agent. The easiest way to add an endorsement to your policy is to ask your insurance agent directly. They can discuss your needs and adjust your policy accordingly.
  2. Add coverage online. With some auto insurance companies that have robust digital services, you may be able to add endorsements through your online account or maybe even the insurer’s mobile app. It all depends on your provider.

Conclusion

Car insurance isn’t one-size-fits-all. Companies tailor policies to specific needs, whether you just started driving for Lyft as a side hustle, took out a loan for a new car, or added an expensive stereo you’d like to protect. Endorsements allow you to adjust your plan as necessary to ensure you always have the right coverage. Now that you have a grasp on endorsements, learn about another key part of car insurance policies: the policy declarations page.

Citations

  1. Do You Know How to Use an Insurance Rider or Endorsement? National Association of Insurance Commissioners. (2020, Dec 30).
    https://content.naic.org/article/consumer-insight-do-you-know-how-use-insurance-rider-or-endorsement

  2. Understanding Auto Insurance Endorsements. Erie Insurance. (2019, May 31).
    https://www.erieinsurance.com/blog/understanding-auto-insurance-endorsements

  3. Automobile Insurance Information Guide. California Department of Insurance. (2018, Feb).
    http://www.insurance.ca.gov/01-consumers/105-type/95-guides/01-auto/auto101.cfm