Blog Insurance Endorsements in Canada

Oct 5, 2022

Everything you need to know about endorsements in insurance

a black family enjoying family time together

Insurance endorsements, or riders, are tailored to your unique coverage needs. They can provide or remove specific aspects of insurance. Most of us have gone through the quotes process to ensure we have the basic (and most affordable) plan to meet our needs for home, life, or auto.

Sometimes we need a little extra protection on our policy to meet our needs. Endorsements in insurance are a common solution for additional coverage that goes beyond your policy limits. They give you the option of customizing your plan and getting further protection.

If you are thinking about adding an endorsement or two, here’s what you need to know about costs and what the process looks like.

What is an endorsement in insurance?

An endorsement in insurance is defined as an amendment or addition to a basic policy. It is designed to improve the range of what is included in your original coverage or remove specific perils. They come at an additional cost to your original plan.

When you consider riders, it’s crucial to take time to educate yourself on specific endorsements and how they meet your needs. Here are some of the key terms to help you understand the differences :

  • Standard : Standard endorsements refer to what people change on their policy. Examples of this are changing the address, adding water damage insurance to a home plan, or adding a boat to your existing a href="https://www.thinkinsure.ca/car-insurance/auto-and-home-quote.php" >insurance bundle.
  • Non-standard : Non-standard endorsements update or change the basic policy outline. This may be choosing to alter it by adding a fireplace or adding a waiver of depreciation with OPCF 43.
  • Mandatory : Mandatory ones are quite rare but refer to something that needs to be changed, usually legally. An example of a mandatory endorsement is if you have a business in a flood-risk area, and your mortgage is federally backed, you need to pay for additional coverage.
  • Voluntary : Voluntary riders are not forced upon or required by law; they are an option offered by the company. They are options the policy owner can choose to add or remove, such as OPCFs.

Riders alter your policy and become part of the legal insurance document. Unless otherwise specified, it will remain active until your contract expires. Some endorsements require a deductible to be paid in the event of a claim. The amount will depend on the rider and the level of coverage selected. Always keep a copy of your original and updated plan.

Insurance endorsement example

Here is an example of an endorsement in insurance:

You recently moved and are searching for an Alberta home insurance quote. While comparing the options and prices, the insurer asks if you have any extra jewellery insurance you want to be protected for a small additional fee. You pass on the offer.

Fast forward three months, and there is a burglar in the neighbourhood that enters five houses, one of them is yours, and your vintage jewellery collection was stolen. Since you did not add a jewellery insurance endorsement, you won’t receive additional compensation.

If you had accepted the additional rider, you could have received extra compensation for the specific items that were stolen.

How much do insurance endorsements cost?

The cost of endorsements in insurance will vary depending on what is being added or adjusted. Some changes may lower your deductible or overall premium, but others may increase your monthly payment, meaning you may pay less in the event of an emergency or accident.

Some other specific factors to consider include when selecting an endorsement include :

  • The age and value of your vehicle or property
  • Location
  • Insurance provider
  • Replacement vs actual cash value
  • Existing coverage

Each of these factors can affect the cost, endorsement limitations, and how it works. Before you commit to amending your current plan, look at your current financial situation and compare the amount of coverage you need and what you can afford.

How to get insurance endorsements

You can get an endorsement at the beginning of a new policy, mid-term or when it is time for renewal. Endorsements are available for all types of plans. It’s as simple as contacting your insurer and letting them know what you want to be included or excluded. They will be able to answer all of your questions and help you with affordability.

Talk with our brokers about your insurance needs and they can suggest riders that may be a good addition to your plan, even if you are getting a quote for tenant insurance.

What is the difference between a rider and endorsement?

Rider and endorsements are the same things – they both refer to changes to insurance. They both cover a wide range of situations and changes to your policy. When you speak with your insurer, you’ll learn that you can remove aspects of your current plan or add specific riders for an additional cost.

family outside smiling

Insurance endorsements for cars

There are plenty of reasons why you may seek an endorsement for your auto insurance. Maybe you want to exclude a driver, or you want additional coverage to protect your vehicle. Here are the top choices for riders as a driver :

  • Loss of vehicle use : One of the various OPCF options includes loss of vehicle, or OPCF 20. This endorsement will cover the cost of a rental car from a peril outlined in your plan.
  • Damage to non-owners automobiles : OPCF 27 offers liability and accident benefits if you damage a vehicle you do not own while driving it. This could be a rental or a friend/family member’s car.
  • Accident waiver : Also known as accident forgiveness, this will cover you from your premium increasing from your first at-fault accident.
  • Depreciation removal : OPCF 43 protects your vehicle from depreciation. You’ll be insured for the full purchase price, not the depreciated value.
  • Family protection : Eligible family members can be covered under the same limits as your mandatory third-party reliability with OPCF 44.

Insurance endorsements for homes

Endorsements for home insurance are beneficial because they can protect everything from your antique book collection to your art collection. If you have priceless items that you cherish in your home, you’ll want to be positive they are protected if there is burglary or other specified peril outlined in your documents.

Even though your documents outline the essential protection, it’s always a good idea to consider what is not part of the policy. Below are some of the most common additions to your home.

  • Water related damages : You may also be surprised to learn that additional elements such as sewer backup insurance and flood insurance are not included in basic home policies. Check with your insurer to see if they offer a complete water package.
  • Vacancy permit : This short-term endorsement is used when a property is under renovation.
  • Home based business : Insurers can cover the property for some businesses, but home-based insurance may require riders.
  • Personal property : Valuable items including jewelry, art, and insurance for your bicycle can all be included under scheduled personal property endorsements.
  • Property replacement : Some insurers offer an actual cash value (ACV) of your property and belongings. This means if you lose or damage something covered by your insurer, you’ll receive the full pay to replace it. This is something to consider when determining home replacement costs for insurance.
  • Building code : If a home is not up to legal standards when an accident happens, you may have to pay out of pocket to have the structure replaced.
  • Service line : In the event of a service line needing repair or replacement, you’ll be covered with this rider.

Types of endorsements for life insurance

Insurance endorsements are available in many forms and lengths. They can all be suited to your additional needs to remove risks that you don’t require coverage for. Keep in mind insurance endorsements are not required by law (unless stated otherwise).

  • Term conversion : If you are comparing term life insurance quotes you can have an additional feature for the policyholder to convert an existing plan to permeant life coverage without a medical exam.
  • Waiver of premium : Similar to disability insurance, you will receive financial support if you experience disability.
  • Long-term care : LTC is available as a rider to cash-valued insurance products. These are related to life insurance. Examples include universal life insurance, whole life insurance, or variable policies. These endorsements can focus on specific death benefits or mid-term changes.
  • Exclusionary :Restricted coverage under a policy for a specific event or condition, such as a pre-existent condition.

What are insurance endorsement codes?

Insurance endorsement codes are the number and letter matched to the endorsement on your plan. Codes are different based on your province. For example, if you have Ontario car insurance and added The OPCF 40 fire deductible, the code is the “OPCF” then the number. An Ontario home insurance endorsement example would be “OEF 23A”. In Alberta, “SEF” is used, then the number.

What is an insurance endorsement premium?

If you have modified your policy with a rider, or have removed specific aspects of your coverage, you have an insurance endorsement premium. This is the amount of money that will be charged to add the rider to your plan. Depending on the endorsement, this could change your payments by a few dollars or up to a few hundred dollars per year.


Insurance endorsements FAQs

If you want to customize or enhance your plan, you can ask your insurer about adding an endorsement. There are a wide variety of enhancements that you can include on your insurance. Think of endorsements as additional benefits to protect your life, home, or auto insurance in Canada.

When you compare life insurance quotes, you may be asked if you want to include a rider. Riders are another term for endorsements, therefore they are policy add-ons that can be customized to meet your needs. Common life insurance riders include child term, guaranteed insurability, and parent protection.

A blanket additional insured endorsement automatically provides extra coverage to someone, or another company, that the policyholder is contractually required to provide. This additional policy will protect other groups or people who are not initially named in the policy, such as contractors or subcontractors for businesses that have commercial business insurance.

Insurance endorsement codes are the number and letter matched to the endorsement on your plan. Codes are different based on your province. For example, if you have Ontario car insurance and added The OPCF 40 fire deductible, the code is the “OPCF” then the number. An Ontario home insurance endorsement example would be “OEF 23A”. In Alberta, “SEF” is used, then the number.

If you have modified your policy with a rider, or have removed specific aspects of your coverage, you have an insurance endorsement premium. This is the amount of money that will be charged to add the rider to your plan. Depending on the endorsement, this could change your payments by a few dollars or up to a few hundred dollars per year.

Insurance endorsements are worth the additional costs

Whether you are looking for additional coverage for your home or are looking to run a business out of your home, insurance endorsements can not only help you guard what is important but also save money on claims. Next time you get a ThinkInsure quote, ask about specific additions that protect your essentials and beyond.