An endorsement for an insurance policy refers to any amendment that alters the terms of the contract either by expanding or restricting coverage. Endorsements can cause premiums to rise or fall depending on the changes made to the policy. Once the customer agrees to the endorsement it becomes part of the insurance policy itself and carries as much legal weight as the base contract.
There can be a number of endorsements attached to your auto insurance policy. You can exclude high-risk drivers in your household from being covered under your policy and therefore reduce the premiums involved. For additional premiums, you can add benefits such as rental car reimbursement. In some cases where coverage is restricted you must sign a waiver for your agent or broker.
Endorsements for homeowners insurance typically expand coverage for personal property. If you own high-value jewelry, for example, you must list these items separately or else coverage will be limited. Other endorsements exist to increase the coverage for the reconstruction cost of your home according to annual inflation.
Many endorsements exist for commercial insurance because businesses face a broad range of specific needs for which their insurance policies must be customized. A common endorsement for your commercial policy is adding an additional insured, which means another person or company with whom you do business would be covered under your policy if he suffers a loss while engaged in business with you.
Endorsements are available for life insurance policies to buy back otherwise excluded causes of death or to dictate how premiums and benefits are paid. A very common example you might see on your life insurance policy is the accelerated death benefit option, which provides you with some or all of your death benefit while you are still alive if you are diagnosed with a terminal or otherwise specified disease.
Location in the Policy
Endorsements become part of the policy when they are issued and are typically found at the end. If you add an endorsement after you receive the initial policy it will be mailed to you separately. A list of all the applicable endorsements will be found on your declarations page, which is typically at the front. A revised declarations page will be sent to you when you add or remove endorsements.
Stephen Hicks has been writing professionally since 2000. He recently published his first novel, "The Seventh Day of Christmas." He spent three years as a licensed life and property/casualty insurance agent in California. Hicks holds a Bachelor of Fine Arts in cinema studies from New York University.