The Walters Agency Podcast

Customizing Your Coverage: Understanding Insurance Endorsements

• Timothy Walters • Episode 8

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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

Speaker 1:

Welcome to the Walters Agency podcast, where insurance meets peace of mind. Hosted by licensed insurance agent and owner, timothy Walters, we're here to help families, homeowners and small business owners throughout East Tennessee protect what matters most Our mission creating win-win-win solutions for insurance. Let's dive in.

Speaker 2:

Insurance endorsements might seem like just extra paperwork, but they can be the key to customizing your policy to fit your unique needs. Welcome back everyone. Skip Monning, co-host, slash producer, back in the studio with Timothy Walters, licensed insurance agent and owner of the Walters Agency. Timothy, how's it going? How y'all doing? Doing just fine today. Hope you are as well.

Speaker 3:

Doing all right Walking and talking.

Speaker 2:

Walking and talking. That's good Beats the alternative. Absolutely so, Timothy. Insurance endorsements are a powerful tool for policyholders. Let's explore how they work and why they matter. So what are endorsements on insurance and how are they valuable?

Speaker 3:

Well, endorsements, you know to simply put, are extra coverages that aren't included in the regular policy. Most standard insurance policies have certain coverages that are non included in the regular policy. Most standard insurance policies have certain coverages that are non-negotiable they're there, they can't be removed. But there's also other coverages that are optional, for instance, like two of the ones that on the homeowner side that I always try to recommend people to get is water backup, water backup through sewer and drains, which is not covered in 99% of regular homeowners insurance policies, and that's for damage for water that backs up through your septic or sewer systems into the home Gray or black water typically coming out of toilets drains, that kind of thing and it happens. It doesn't happen as often as, say, regular water claims, which is why it's an endorsement, not a standard coverage, but when it does happen, a lot of money to fix properly. So you know, if that coverage is not included on your policy and that particular kind of loss happens, that's all out of pocket. You know it's not good.

Speaker 3:

The other one, that's when it's available, and it's not always available is an endorsement for hidden water damage.

Speaker 3:

So that's where things like slow leaks in areas that maybe aren't easily seen behind appliances, refrigerators, dishwashers, pipes behind walls that have a slow leak that you know causes damage over time.

Speaker 3:

What a lot of people don't understand about homeowners insurance is typically that sort of damage is considered to be a maintenance issue and it's not considered to be an insurable loss unless it's endorsed.

Speaker 3:

So some companies do have endorsements that will say hey, look, if you have a slow leak that wasn't identified because it was behind your dishwasher or underneath your refrigerator or something along that line and it causes rot, mold, that kind of thing, if you have that endorsement there's typically coverage available for the cost of getting that fixed. If it's not endorsed you're Most of the time you're going to be out of pocket on that expense. So knowing what is and isn't covered on your policy is important. Talking to your agent about your policy, asking them, hey, are there any endorsements that you would recommend for something that maybe isn't covered under the standard policy that we could cover with an endorsement, asking that question to a solid, experienced agent is probably going to be beneficial for you because they can explain what they would recommend, why they would recommend, and tell you how much extra it's going to cost, because there is an extra cost involved, and then you can make that decision from an informed standpoint.

Speaker 2:

So gotcha, so can endorsements impact your premiums.

Speaker 3:

Yeah, absolutely. It's extra coverage. So of course it's going to cost us some extra money. A lot of times it's not to cost us some extra money. A lot of times it's not as much as people think, especially for the amount of coverage that can be provided. I'll just give you an example.

Speaker 3:

Going back to the water backup, last time I actually dealt with a claim it's been several years now, actually thankfully, I had a client who had a rental property in Jefferson City and there was a black water backup from the septic system that backed up into the bathroom. It's a small bathroom, like 10 by 10 maybe, and thankfully the water did not spread to any other part of the house, but it did go into the subflooring and all that kind of stuff. So, after all the cost of getting the company to come out to do the water mitigation, you know, get everything cleaned up, do the antimicrobial, which you want to do, otherwise you're setting yourself up for some really nasty issues with those types of losses, that small leak or leak, that small backup in that small room in 2021,.

Speaker 1:

I think it was almost $14,000.

Speaker 3:

Wow. So fortunately that particular policy, we had put the water endorsement on there. I don't think it covered the entire cost. I think the endorsement was maybe $10,000, but that was money that the insurance company paid that didn't have to come out of their pocket. Again, this has been many years ago, I can't remember all the specifics, but definitely good for them to have. These people fortunately were not financially bad off so they were able to cover the part of the damage that was not covered by the insurance. But if they hadn't had that endorsement 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 endorsement only costs an extra like a hundred dollars a year, maybe on their policy.

Speaker 2:

So oh, definitely worth it then.

Speaker 3:

Yeah definitely Well definitely worth asking about.

Speaker 2:

Well, I had a. I had a cat long, cat long story here I'm gonna make really short. But I had a cat, uh, house cat. I may have told you this in the past but turned the water on in a bathroom. He was locked in that my daughter had put him up in and she in and uh to turn the water on. It ran for about three or four hours with the sink, with the sink plugged, yeah. So same kind of deal. Thankfully I must have had endorsements in my policy because I mean the total cost was about six grand out of pocket for me was probably half that. So I guess that means I had an endorsement.

Speaker 3:

That would be an interesting one. I would like to find out, like, how that was paid. It's like those farmers commercials when they talk about the crazy things that have been covered. Yeah, I like those because those are actual events that were covered by insurance. And I love it because people tell me all the time when I'm going to know insurance is a scam or this is too expensive, and I'm like, look, I understand, but if you do need this, it's a lot better to pay a thousand or two thousand dollars a year for your insurance and then not have to pay out of pocket twenty thousand dollars because a pot bust 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 that story. You know, next time I talk to somebody I say do you own cats?

Speaker 2:

Well, Cat turned the water on, and you know it's funny, they're devious little creatures, you know the remediation company that came in I won't name them, but when they came in to start working on it and pull the subflooring up and do all this stuff had tile in 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 out, put the tile back down. Anyway, when they came in to evaluate the situation when they were leaving, they got me to sign the quote or whatever, and there was a picture of the cat on 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 the cause of the event, we have to do that. So there's, you know this nice little picture of my cat.

Speaker 3:

There's the cat, yeah, sitting on the sink just acting like didn't just cause all kinds of trouble.

Speaker 2:

Oh I.

Speaker 3:

Oh, it's in the contract. You know, and I always tell people eligibility is spelled out in the contract. It's usually pretty straightforward. If people ever have questions, I always advise them to actually contact the carrier directly because all the contracts are a little bit different. But you know, just you know, for things like like in a homeowner's contract, they spell out in the standard policy this is the type of water damage that they'll cover and then they specifically exclude other things Depending on the type of contract it is. So for a standard HO3 or HO5 contract, usually the exclusions are very explicit because the way the state law is no-transcript. That's why, like I said, if you actually 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, if they don't cover something like backup of water through your septic or sewer systems, that's specifically excluded in most policies and then that's why you can actually add the endorsement to basically add that coverage in.

Speaker 3:

So you know, nobody likes reading insurance contracts. I've been doing this for almost 15 years now. I don't particularly care to read insurance contracts, but if you are curious about what is and isn't covered in your policy, it's usually spelled out. And as to how you know how they determine that they have actuarials. You know that say, look at all the lost data for this particular type of policy in this particular area of market, and that's how they determine how they write their contracts.

Speaker 3:

They're, and they're typically looking, you know, three or four years ahead, trying to figure out, hey, what, what's likely to happen because they got to look out for you know, potential losses and all that kind of thing. So but yeah, the contract, you can always refer back to the contract and if it's not specifically included or specifically excluded, it's a question you can always ask your agent. They may be able to answer or they may have to refer it out to the carrier to get a more detailed determination on that. So again, always ask questions. The questions that are asked are the ones that never get answered.

Speaker 2:

So that's right. That's right. Well, it sounds like endorsements offer a ton of flexibility for policy holders, which is really good to know, so thanks for breaking that down for us. I have a much better understanding now. Hopefully our listeners do too, so we appreciate it.

Speaker 3:

Yeah, talking about endorsements, that's the insurance guy. We love it. There you go. All right, timothy. Well, we will let you go and we'll.

Speaker 2:

That's the insurance guy. We love it. There you go. There you go. All right, timothy, we will let you go and we'll see you in the next episode.

Speaker 3:

All right.

Speaker 2:

Thank you, I appreciate it.

Speaker 1:

That's a wrap on this episode of the Walters Agency Podcast. Ready to find the right coverage for your home, business or family? Call or text 423-417-2070 for a free 20-minute consultation. Until next time, stay covered, stay protected and keep winning with the Walters Agency.