What is the definition of a "rider" in insurance terminology?

A "rider" in insurance terminology refers to an additional provision that modifies the original insurance policy. Riders can be added to an insurance policy to either expand coverage or limit it under certain conditions. This customization allows policyholders to tailor their coverage to meet specific needs that may not be fully addressed by the base policy. Riders can introduce new benefits or coverage options, such as adding coverage for specific types of events or perils, which allows for enhanced protection.

Understanding the role of riders is crucial for both policyholders and insurance brokers, as they represent a way to adjust policies according to individual circumstances and risk management preferences. This flexibility is particularly valuable in areas like life insurance, health insurance, and property insurance, where unique personal or business situations may warrant additional coverage.

Other options do not align with the definition of a rider. A new insurance policy refers to a standalone contract rather than a modification of an existing one. The term for the insured party is simply the policyholder or applicant, which does not describe a rider. Lastly, a type of policy that covers special risks represents a broader category of insurance products rather than a specific modification to an existing policy.