5 extra home insurance endorsements you don't need

We already know that insurance isn’t cheap. Along with monthly premiums and sometimes-high deductibles, insurance companies never actually pay out enough to replace all your stuff. Even with the best coverage, you still end up paying money to return your life to normal.

Endorsements

Endorsement is a fancy insurance word for add-on. Take your typical home insurance policy. People are usually covered for theft, fire, damages, and third-party liability. What happens though, if you have an antique tea set that your insurance company excluded? Or a speed boat in your garage? Or if you have ghosts? Fortunately, you can insure yourself for these situations with endorsements.

Endorsements you don’t need

Even though there are endorsements that can come in handy, there are other endorsements that you don’t need. All they will do is cost you extra money. Here are five endorsements you should think twice about paying for:

  1. Schedule personal articles: While some people want to insure every expensive thing they own – fine art, antiques, furs, boats, golf clubs – the high cost of insuring expensive goods is often too high to justify. The chances of having Grandma’s pricey silverware stolen are slim, but the insurance company will charge you as if your items were certain to be stolen in the event of a home invasion.
  2. Stalking, cyber-bullying: Although the pain and psychological damage of harassment is very real, the odds of being successfully sued are low. Instead of spending money on this endorsement, use your cash to get a hobby and avoid harassing anyone.
  3. The paranormal: In Canada, certain insurance companies insure against ghosts, alien invasions, and other paranormal events. Regular Joe Canadian, though, will likely never see a ghost or alien in his life, making this endorsement a cash cow for insurance companies that offer it. Besides, if aliens did invade, your insurance money might be difficult to collect.
  4. Inflation guard and replacement cost: Both of these endorsements are meant put you in the exact same financial situation you were in before you needed to make a claim. Inflation guard increases your insurance coverage by a certain percentage each year and replacement cost pays the cost to replace an item today, rather than paying the item’s value. These endorsements aren’t cheap because if you claim against them, you end get paid a lot more than if you didn’t have them. That said, they might not be for everyone. Saving the cost of the endorsement in a high-interest savings account would be a better use of your money if you never need to file a claim.
  5. Extended coverage: Extended water damage, increased personal injury insurance, and identity theft are all endorsements that we’d like to have if we need them. Unfortunately, even the most extensive water damage policies don’t cover everything and most home insurance policies come with more than enough personal liability and identity theft coverage.

Endorsements can come in handy if you need to make a claim. Unfortunately, the most helpful endorsements are also the most expensive. Instead of spending money on home insurance endorsements you don’t need, self-insure by saving or investing the cost of the endorsements. That way, if the unexpected occurs, you’ll have the money to replace it without the headache of filing a claim.

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