What is the purpose of a "rider" in an insurance policy?

A rider in an insurance policy serves to provide additional coverage or modify existing terms of the policy. Riders are endorsements or attachments added to a standard insurance contract that customize the coverage to better meet the policyholder's specific needs. For instance, a homeowner might add a rider to cover valuable items like jewelry or art, which may be excluded under basic coverage. Variations can also involve changes to deductibles, limitations, or broader definitions of insured events.

The other options outline functions that do not accurately define what a rider does. Reducing premium costs relates to discounts or adjustments in coverage rather than the purpose of a rider. Exclusions in a policy specifically point to terms that remove certain types of claims from coverage rather than providing additional or modified coverage. Designating a beneficiary pertains to life insurance policies and does not fit the function of a rider within the broader context of insurance. Thus, defining a rider as a means to enhance or adjust coverage encapsulates its primary role within insurance policies.