What Is an Insurance Rider?

by Michelle Dwyer; Updated September 26, 2017

An insurance rider is additional coverage you add to an existing policy. It offers extended coverage or adds a new element to your coverage. Most types of insurance, from medical to automotive, offer riders. Some riders might be unnecessary; others might be important to your circumstances.

Increasing Coverage

Riders vary by insurance company and type. For example, life insurance policies sometimes offer a rider allowing you to purchase additional life insurance at a later date without the hassle of a medical exam. This is known as a guaranteed insurability rider. In this case, there is no new coverage on the policy, but rather increased coverage on your main policy should you file a claim. Another example of increased coverage from a rider is new car replacement, or waiver of depreciation, offered on some auto policies. With this rider, your insurance company will replace the full value of your car should it be totaled in an accident.

Tips

Adding Other Coverage

In some cases, purchasing a rider adds a whole new element to your insurance coverage. For example, when selecting a health insurance plan, many times you have the option of adding on a dental and vision rider to cover dental and eye-exam expenses not already included. These riders vary depending on your insurance company. Examples of auto insurance riders that add extra elements to your policy are rental car reimbursement and towing coverage.

Tips

  • All insurance policies will come with a detailed list of covered services for your rider. United Healthcare, for example, explains its dental rider policy in an easy-to-read chart.

Rejecting Riders

In some circumstances, certain riders already are included on your policy. In those cases, you must explicitly decline that coverage if don't want it. This is the case with uninsured/under-insured motorist coverage, which covers you in the event you are hit by a driver who doesn't have adequate insurance. When applying for an auto policy, your agent will send documents for you to sign either accepting or rejecting the rider.

Tips

    • Depending on your state, UIM coverage might be mandatory. Check with your policy holder.

Cost of Riders

Your specific circumstances are taken into account before an insurance company quotes you a price for the rider. The cost for some common, more general riders can be as much as 5 percent to 15 percent of your premium. Worthwhile riders depend on your financial situation and budget.

About the Author

Michelle Dwyer is a U.S. Army veteran writing fiction and nonfiction since 2003. She specializes in business, careers, leadership, military affairs and organizational change and behavior. Dwyer received an MBA from Tarleton State University/Texas A&M Central Texas and an MFA in creative writing from National University in La Jolla, Calif.