What function does a rider or endorsement serve in an insurance policy?

A rider or endorsement is an addition or modification to the original insurance policy that serves to add coverage, change the terms of coverage, or otherwise adjust the policy to better fit the needs of the insured. This function allows policyholders to customize their insurance to address specific risks or circumstances that might not be covered under the standard policy.

For instance, a homeowner might purchase an endorsement to add coverage for high-value items such as jewelry or fine art, which might have limited coverage in a standard homeowners policy. Similarly, an endorsement could modify the coverage limits or deductible amounts on an existing policy, providing flexibility to adapt the insurance according to the policyholder's requirements.

The other options describe different concepts that do not align with the function of a rider or endorsement. Limiting coverage pertains to exclusions rather than enhancements. Cancelling the policy refers to terminating the agreement entirely, which is a separate action. Increasing the premium is a financial consideration that may result from adding coverage but is not the primary function of a rider or endorsement itself.