What does the term “rider” mean in insurance?

In insurance, the term “rider” refers to an additional provision added to a standard policy. This allows policyholders to customize their insurance coverage to better fit their specific needs. Riders can enhance coverage by adding specific benefits, altering policy limits, or expanding the scope of coverage for particular situations that are not fully addressed in the standard policy.

For instance, in a life insurance policy, a person might add a rider to cover accidental death, which would provide extra benefits if the insured dies due to an accident. Similarly, in homeowners insurance, a rider could be added to cover specific high-value items like jewelry or art that may exceed the standard coverage limits.

Understanding the function of a rider is crucial for policyholders, as it allows them to ensure they have the appropriate level of protection they require for unique risks or assets, thereby improving their overall insurance strategy.