If you’re like most people, you’re always looking for ways to save money on your car insurance. Well, here’s some good news: There are two endorsements you can add to your policy that will protect you from a rate increase if you make a claim. Read on to learn more about them and how they can help keep your rates down.
What Are Endorsements in Car Insurance?
An endorsement, also known as a rider, is a type of insurance policy that adds, removes, excludes, or modifies coverage. A rider/endorsement can also be used to expand regular coverage limits and take precedence over the original agreement or policy. An endorsement is a feature that can be added to your vehicle insurance policy to increase or decrease your coverage. It often adds an extra layer of protection against unusual conditions that could result in a significant increase in your annual insurance price. For some drivers, a basic, no-frills auto insurance policy may be sufficient, but for others, the additional coverage provided by an endorsement can be a money-saver in the long term. Let’s take a look at a few endorsements that can help you avoid a rate hike.
According to one’s unique needs and preferences, one may feel compelled to make modifications to their vehicle insurance coverage. In an automobile insurance policy, these are referred to as endorsements. In layman’s terms, an endorsement in a car insurance policy is an addition or modification to your policy’s existing terms and policies. Riders are another term for endorsements in an insurance policy. Endorsements enable the addition, deletion, modification, or elimination of any sections or words covered by the policy.
Because the basic purpose of an insurance endorsement is to make changes to the policy, it could be anything from increasing or decreasing coverage limits, deducting certain parts (as allowed by law) to lower the total premium amount, changing your personal information, or making other special amendments to restrict or expand certain terms and scope covered by your car insurance policy, giving you more flexibility. You can legally bind your preferred alterations to the insurance contract with these endorsements.
What Is an Endorsement Premium?
An endorsement is a policy modification that can be made throughout the policy’s term without having to renew it. As a result of the endorsement, your premiums may change. They’re commonly found in property and casualty insurance plans. Health and life insurance coverage can also be changed by riders.
How Do Endorsements Affect Your Insurance?
If a driver has endorsements on their license, the insurer will assume that they are more likely to file a high-cost claim. If you have insurance and are convicted, most insurers will only ask you to reveal the conviction code when you renew your coverage. This is the time of year when many drivers’ insurance premiums rise.
Types of Car Endorsements
Accident Forgiveness Endorsement
The first endorsement is called accident forgiveness. This coverage will keep your rates from going up if you make a claim, as long as you haven’t had any accidents in the past. So, if you’re involved in an accident and need to make a claim, your rates won’t go up as a result. An accident forgiveness endorsement is a policy add-on that forgives you for your first at-fault accident. This means that your rates will not go up as a result of the accident, and you won’t have to pay any extra fees. It’s a great way to protect your rates from going up if you have a little accident-prone streak. After your first at-fault collision, an accident forgiveness endorsement shields you from a premium hike. In other words, your insurance company will treat your first at-fault claim as if it never happened, and your second claim will be treated as the first. The only thing you’d have to worry about is paying the deductible. Depending on your insurance provider’s policies, your accident forgiveness may be reset after a few years rather than terminating completely after your first car accident. The endorsement is also automatically transferred to each new vehicle you buy. It does not, however, follow you from one insurance provider to the next.
Let’s say you want to change your vehicle insurance company. As a result of the collision/claim on your record, your new insurance company may charge you a higher premium. One insurance company may have forgiven the claim, but another has not forgotten about it. If you have this endorsement, any accidents you have will not count against you when your insurer reviews your policy for a rate increase. This can be a lifesaver if you have a few accidents in a row, as your rates could go up significantly as a result of them.
That’s because, even if you didn’t see a premium increase after your first at-fault claim, your insurance company nonetheless recorded the occurrence, and it will be part of your insurance history for a long time.
Minor Conviction Protection
Minor conviction protection is an endorsement that you can add to your car insurance policy. If you have this protection, any convictions for minor traffic violations will not count against you when your insurer reviews your policy for a rate increase. This can be a lifesaver if you have a few convictions in a row, as your rates could go up significantly as a result of them. So, if you’re looking for ways to protect your car insurance rates, be sure to ask your insurer about adding accident forgiveness and a protected no-claims bonus to your policy. These endorsements can save you a lot of money in the long run.
When you have a small conviction protection endorsement, you are protected from a rate increase if you commit a minor traffic offense, such as:
a. Failure to signal before changing lanes is a serious offense.
b. Disobedience to a traffic sign
This endorsement, like accident forgiveness, only applies to your first conviction. To qualify for minor conviction protection, you must have held a valid driver’s license for at least six years and have had no convictions in the previous three years. You must also be a current policyholder with the insurance company from which you want the endorsement.
It’s important to distinguish between minor traffic violations and significant traffic violations and criminal convictions. The last two are, respectively, speeding in a construction zone and driving while inebriated. If you commit these types of offenses, minor conviction protection will not benefit you.
Is It Worthwhile to Add a Vehicle Insurance Endorsement to Your Policy?
There are a number of different endorsements that you can add to your car insurance policy, and each one has its own benefits. So, it’s important to weigh the pros and cons of each endorsement before you decide whether or not to add it. One endorsement that might be worth considering is accident forgiveness. If you have this protection, any accidents you have will not count against you when your insurer reviews your policy for a rate increase. This can be a lifesaver if you have a few accidents in a row, as your rates could go up significantly as a result of them.
Another endorsement to consider is a protected no claims bonus. This coverage will keep your rates from going up if you make a claim, as long as you haven’t had any accidents in the past. So, if you’re involved in an accident and need to make a claim, your rates won’t go up as a result.
By amending your auto insurance policy to include one of these endorsements, you can avoid a high rate hike that could put you out of business. There are also various forms of endorsements to think about. Some the products restrict your coverage in exchange for a lower premium, such as the Comprehensive Cover – Limited Glass option, which covers you solely for damage to your windshield and glass caused by theft and vandalism rather than normal use. Others, such as the Limited Waiver of Depreciation, ensure that your insurance payout is not lowered by the depreciated worth of your car.
Even if you’re on a tight budget, most endorsements will only add a few dollars to your monthly bill, so it’s definitely worth looking into your options to see if there’s one that’s right for you. If your premium has increased and you don’t have an endorsement to protect you against a rate increase, research car insurance rates to be sure you’re still getting the best deal.
To Sum It All Up
An endorsement/rider modifies the policy and becomes a legally binding insurance contract that lasts until the contract ends. If the endorsement/rider has a particular or restricted duration for which it is valid, this is an exemption. It’s possible that it’ll renew under the same terms as the rest of your policy. After making a policy change, always maintain a copy of the new document that demonstrates or specifies the new endorsement. When an endorsement lowers or raises your coverage, it can affect your premium.