What is an "endorsement" in an insurance policy?

An endorsement in an insurance policy refers to a written amendment or addition that modifies the terms or coverage of an existing insurance contract. This can involve adding, removing, or altering specific coverage features to better suit the policyholder's needs. Endorsements serve to customize an insurance policy beyond its original specifications and are essential for addressing changes in circumstances, legal requirements, or personal preferences regarding coverage.

For instance, policyholders might seek endorsements to include coverage for a new property, extend coverage limits, or exclude specific risks that were initially part of the standard policy. Because endorsements are formal modifications, they are documented and signed, ensuring that both the insurer and the insured have a clear understanding of the updated terms.

Understanding the concept of endorsements is crucial in insurance regulation, as they play a significant role in shaping the actual coverage experience for consumers and ensuring compliance with regulatory standards.