What does an endorsement in an insurance policy do?

An endorsement in an insurance policy serves to alter or modify the existing terms, conditions, or coverage within that policy. It is a written amendment that can add, remove, or change specific aspects of the insurance coverage provided. This means that if a policyholder wishes to adjust their coverage—whether to add a new type of coverage, exclude certain risks, or clarify provisions—they would typically use an endorsement to formally document those changes.

Endorsements are essential for customizing insurance policies to better meet the unique needs of the insured, allowing for greater flexibility. For example, if someone needs to add coverage for a newly acquired valuable item or change the deductible amount, an endorsement is the appropriate mechanism to reflect those changes within the policy.

While endorsements can influence the premium amount—potentially increasing it when more coverage is added or decreasing it when certain risks are excluded—the primary function of an endorsement is to adjust the terms or conditions of the policy itself, making it crucial for policy customization.