What is an endorsement in an insurance policy?

An endorsement in an insurance policy serves as a written modification that either alters or adds coverage to the existing terms of the policy. This can include changes like extending coverage to new properties, adding or removing named insured parties, or adjusting the limits of coverage. Endorsements are important because they allow the policyholder to tailor their insurance to meet specific needs that may not be fully covered under the original terms.

Understanding endorsements is crucial for policyholders, as they ensure that their coverage accurately reflects current circumstances and protects against potential risks. By utilizing endorsements, insurers can offer greater flexibility and customization in insurance products, thus enhancing the policyholder's experience and ensuring adequate protection.

While other options may relate to insurance policies in various ways, they do not accurately define what an endorsement is within the context of insurance.