Customizing Your Coverage: Understanding Insurance Endorsements

What Are Endorsements On Insurance And How Are They Valuable?

Your standard insurance policy might be leaving you dangerously exposed without you even realizing it. Discover the critical coverage gaps that could cost you thousands and how simple endorsements can provide the protection you actually need.

In this eye-opening discussion with Timothy Walters, we dive deep into the world of insurance endorsements – those optional coverage add-ons that turn basic policies into comprehensive protection plans. Timothy reveals the two endorsements he recommends most frequently: water backup through sewer and drains, and hidden water damage coverage. Both address scenarios explicitly excluded by most standard policies, potentially saving homeowners from devastating financial losses when disaster strikes.

The conversation takes a fascinating turn with real-world examples that demonstrate exactly why these endorsements matter. Timothy shares the story of a rental property owner who faced a $14,000 sewage backup cleanup that would have been entirely out-of-pocket without the right endorsement (which cost only about $100 annually).

What makes this discussion particularly valuable is Timothy's straightforward explanation of how insurance contracts work, what they typically exclude, and why endorsements represent such a crucial opportunity to customize your coverage. As he wisely notes, "The questions that are never asked are the ones that never get answered." Don't leave your financial protection to chance – learn how a small investment in the right endorsements can save you from devastating out-of-pocket expenses.

Ready to review your coverage and identify potential gaps? Call or text 423-417-2070 for a free 20-minute consultation with The Walters Agency team. Protect what matters most with insurance that actually works when you need it.

To learn more about The Walters Agency visit:
https://www.brightway.com/agencies/tn/knoxville/0237/team
The Walters Agency
7009 Asheville Hwy
Knoxville, TN 37924
423-417-2070

Episode Transcript

Speaker 1 (00:04):
Welcome to the Walters Agency podcast, where
insurance meets peace of mind.
Hosted by licensed insuranceagent and owner, timothy Walters
, we're here to help families,homeowners and small business
owners throughout East Tennesseeprotect what matters most Our
mission creating win-win-winsolutions for insurance.
Let's dive in.

Speaker 2 (00:33):
Insurance endorsements might seem like
just extra paperwork, but theycan be the key to customizing
your policy to fit your uniqueneeds.
Welcome back everyone.
Skip Monning, co-host, slashproducer, back in the studio
with Timothy Walters, licensedinsurance agent and owner of the
Walters Agency.
Timothy, how's it going?
How y'all doing?
Doing just fine today.

(00:54):
Hope you are as well.

Speaker 3 (00:56):
Doing all right Walking and talking.

Speaker 2 (00:58):
Walking and talking.
That's good Beats thealternative.
Absolutely so, Timothy.
Insurance endorsements are apowerful tool for policyholders.
Let's explore how they work andwhy they matter.
So what are endorsements oninsurance and how are they
valuable?

Speaker 3 (01:16):
Well, endorsements, you know to simply put, are
extra coverages that aren'tincluded in the regular policy.
Most standard insurancepolicies have certain coverages
that are non included in theregular policy.
Most standard insurancepolicies have certain coverages
that are non-negotiable they'rethere, they can't be removed.
But there's also othercoverages that are optional, for
instance, like two of the onesthat on the homeowner side that

(01:39):
I always try to recommend peopleto get is water backup, water
backup through sewer and drains,which is not covered in 99% of
regular homeowners insurancepolicies, and that's for damage
for water that backs up throughyour septic or sewer systems
into the home Gray or blackwater typically coming out of
toilets drains, that kind ofthing and it happens.

(02:02):
It doesn't happen as often as,say, regular water claims, which
is why it's an endorsement, nota standard coverage, but when
it does happen, a lot of moneyto fix properly.
So you know, if that coverageis not included on your policy
and that particular kind of losshappens, that's all out of
pocket.
You know it's not good.

(02:23):
The other one, that's when it'savailable, and it's not always
available is an endorsement forhidden water damage.
So that's where things like slowleaks in areas that maybe
aren't easily seen behindappliances, refrigerators,
dishwashers, pipes behind wallsthat have a slow leak that you
know causes damage over time.

(02:44):
What a lot of people don'tunderstand about homeowners
insurance is typically that sortof damage is considered to be a
maintenance issue and it's notconsidered to be an insurable
loss unless it's endorsed.
So some companies do haveendorsements that will say hey,
look, if you have a slow leakthat wasn't identified because
it was behind your dishwasher orunderneath your refrigerator or
something along that line andit causes rot, mold, that kind

(03:07):
of thing, if you have thatendorsement there's typically
coverage available for the costof getting that fixed.
If it's not endorsed you'reMost of the time you're going to
be out of pocket on thatexpense.
So knowing what is and isn'tcovered on your policy is
important.
Talking to your agent aboutyour policy, asking them, hey,
are there any endorsements thatyou would recommend for
something that maybe isn'tcovered under the standard

(03:29):
policy that we could cover withan endorsement, asking that
question to a solid, experiencedagent is probably going to be
beneficial for you because theycan explain what they would
recommend, why they wouldrecommend, and tell you how much
extra it's going to cost,because there is an extra cost
involved, and then you can makethat decision from an informed
standpoint.

Speaker 2 (03:48):
So gotcha, so can endorsements impact your
premiums.

Speaker 3 (03:55):
Yeah, absolutely.
It's extra coverage.
So of course it's going to costus some extra money.
A lot of times it's not to costus some extra money.
A lot of times it's not as muchas people think, especially for
the amount of coverage that canbe provided.
I'll just give you an example.
Going back to the water backup,last time I actually dealt with
a claim it's been several yearsnow, actually thankfully, I had

(04:15):
a client who had a rentalproperty in Jefferson City and
there was a black water backupfrom the septic system that
backed up into the bathroom.
It's a small bathroom, like 10by 10 maybe, and thankfully the
water did not spread to anyother part of the house, but it
did go into the subflooring andall that kind of stuff.

(04:35):
So, after all the cost ofgetting the company to come out
to do the water mitigation, youknow, get everything cleaned up,
do the antimicrobial, which youwant to do, otherwise you're
setting yourself up for somereally nasty issues with those
types of losses, that small leakor leak, that small backup in

(05:00):
that small room in 2021,.

Speaker 1 (05:04):
I think it was almost $14,000.

Speaker 3 (05:07):
Wow.
So fortunately that particularpolicy, we had put the water
endorsement on there.
I don't think it covered theentire cost.
I think the endorsement wasmaybe $10,000, but that was
money that the insurance companypaid that didn't have to come
out of their pocket.
Again, this has been many yearsago, I can't remember all the
specifics, but definitely goodfor them to have.

(05:29):
These people fortunately werenot financially bad off so they
were able to cover the part ofthe damage that was not covered
by the insurance.
But if they hadn't had thatendorsement all of it would have
been out of pocket.
So you know, it's good to have,definitely good to have, wow.
Yeah, I think the endorsementonly costs an extra like a
hundred dollars a year, maybe ontheir policy.

Speaker 2 (05:51):
So oh, definitely worth it then.

Speaker 3 (05:53):
Yeah definitely Well definitely worth asking about.

Speaker 2 (05:56):
Well, I had a.
I had a cat long, cat longstory here I'm gonna make really
short.
But I had a cat, uh, house cat.
I may have told you this in thepast but turned the water on in
a bathroom.
He was locked in that mydaughter had put him up in and
she in and uh to turn the wateron.
It ran for about three or fourhours with the sink, with the
sink plugged, yeah.
So same kind of deal.

(06:17):
Thankfully I must have hadendorsements in my policy
because I mean the total costwas about six grand out of
pocket for me was probably halfthat.
So I guess that means I had anendorsement.

Speaker 3 (06:29):
That would be an interesting one.
I would like to find out, like,how that was paid.
It's like those farmerscommercials when they talk about
the crazy things that have beencovered.
Yeah, I like those becausethose are actual events that
were covered by insurance.
And I love it because peopletell me all the time when I'm
going to know insurance is ascam or this is too expensive,
and I'm like, look, I understand, but if you do need this, it's

(06:49):
a lot better to pay a thousandor two thousand dollars a year
for your insurance and then nothave to pay out of pocket twenty
thousand dollars because a potbust in your house or a cat
turned the water on.
Yeah, I got to remember that.
I don't think you told me that.
I'm going to remember thatstory.
You know, next time I talk tosomebody I say do you own cats?

Speaker 2 (07:10):
Well, Cat turned the water on, and you know it's
funny, they're devious littlecreatures, you know the
remediation company that came inI won't name them, but when
they came in to start working onit and pull the subflooring up
and do all this stuff had tilein there but there was also some
vinyl under the tile.
So they had to pull all that up, pull all the vinyl up, dry it

(07:30):
out, put the tile back down.
Anyway, when they came in toevaluate the situation when they
were leaving, they got me tosign the quote or whatever, and
there was a picture of the caton the document and I said why
is there a picture of the cat?
He said we always have to.
If we can take a picture of thecause of the event, we have to
do that.
So there's, you know this nicelittle picture of my cat.

Speaker 3 (07:51):
There's the cat, yeah , sitting on the sink just
acting like didn't just causeall kinds of trouble.

Speaker 2 (07:56):
Oh I.

Speaker 3 (08:05):
Oh, it's in the contract.
You know, and I always tellpeople eligibility is spelled
out in the contract.
It's usually prettystraightforward.
If people ever have questions,I always advise them to actually
contact the carrier directlybecause all the contracts are a
little bit different.
But you know, just you know,for things like like in a

(08:26):
homeowner's contract, they spellout in the standard policy this
is the type of water damagethat they'll cover and then they
specifically exclude otherthings Depending on the type of
contract it is.
So for a standard HO3 or HO5contract, usually the exclusions
are very explicit because theway the state law is

(09:02):
no-transcript.
That's why, like I said, if youactually look at your standard
homeowner's insurance contracts,they're pretty explicit about
what is and isn't covered.
And that's why, like I said, ifthey don't cover something like
backup of water through yourseptic or sewer systems, that's
specifically excluded in mostpolicies and then that's why you
can actually add theendorsement to basically add

(09:22):
that coverage in.
So you know, nobody likesreading insurance contracts.
I've been doing this for almost15 years now.
I don't particularly care toread insurance contracts, but if
you are curious about what isand isn't covered in your policy
, it's usually spelled out.
And as to how you know how theydetermine that they have
actuarials.
You know that say, look at allthe lost data for this

(09:45):
particular type of policy inthis particular area of market,
and that's how they determinehow they write their contracts.
They're, and they're typicallylooking, you know, three or four
years ahead, trying to figureout, hey, what, what's likely to
happen because they got to lookout for you know, potential
losses and all that kind ofthing.
So but yeah, the contract, youcan always refer back to the

(10:07):
contract and if it's notspecifically included or
specifically excluded, it's aquestion you can always ask your
agent.
They may be able to answer orthey may have to refer it out to
the carrier to get a moredetailed determination on that.
So again, always ask questions.
The questions that are askedare the ones that never get
answered.

Speaker 2 (10:26):
So that's right.
That's right.
Well, it sounds likeendorsements offer a ton of
flexibility for policy holders,which is really good to know, so
thanks for breaking that downfor us.
I have a much betterunderstanding now.
Hopefully our listeners do too,so we appreciate it.

Speaker 3 (10:42):
Yeah, talking about endorsements, that's the
insurance guy.
We love it.
There you go.
All right, timothy.
Well, we will let you go andwe'll.

Speaker 2 (10:48):
That's the insurance guy.
We love it.
There you go.
There you go.
All right, timothy, we will letyou go and we'll see you in the
next episode.

Speaker 3 (10:53):
All right.

Speaker 2 (10:54):
Thank you, I appreciate it.

Speaker 1 (11:00):
That's a wrap on this episode of the Walters Agency
Podcast.
Ready to find the rightcoverage for your home, business
or family?
Call or text 423-417-2070 for afree 20-minute consultation.
Until next time, stay covered,stay protected and keep winning

(11:20):
with the Walters Agency.