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These are terms insurance companies use to explain special
exceptions
to coverage in their insurance plans. For example, you may have
injured your
knee playing tennis and needed some minor surgery. Six months later
you applied for insurance. On the application you mentioned your
knee surgery.
The underwriters at the insurance company decided that since the
surgery was recent there was a notable risk of recurrence. Otherwise
you were healthy,
and they wanted to offer insurance, but they felt they could
possibly lose money due to your knee problem. What do they do? They
put a “rider” (“waiver”)
on the knee, which simply means they will insure you but waive
covering anything that happens to the knee. In other words they will
insure your whole body
except your knee. They will exclude covering anything that happens
to the knee.
Sometimes these “riders/waivers” are permanent. Other times the
company will issue a two-year, three-year or five-year rider. If the
condition does not
deteriorate or recur over a period of time, often they will “lift”
the rider and give you full coverage. The option of using “riders”
is good for the insurance
companies and for the general public because it enables the
companies to insure people whom they would otherwise decline to
cover. |
