What Is an Insurance Endorsement?

Definition & Examples of an Insurance Endorsement

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An insurance endorsement is an amendment or addition to an existing insurance contract that changes the terms or scope of the original policy.

Learn more about Insurance endorsements and how they work.

What Is an Insurance Endorsement?

Endorsements are also referred to as riders. They can be used to add, delete, exclude, or otherwise alter coverage. They can be issued during your policy term, at the time of purchase, or at renewal and they're legally binding amendments to an insurance contract.

  • Alternate name: Rider

How an Insurance Endorsement Works

An illustration of the basics of an insurance endorsement, as explained in the article.
The Balance

An insurance endorsement is a policy change that can be added mid-term without renewing the policy. Your premiums may be adjusted as a result of an insurance endorsement. Endorsements are used on property and casualty insurance policies; riders are used to make changes to health and life insurance policies.

Endorsements remain in force until your policy expires and may renew under the same terms and conditions as the rest of your policy. The exception to this is if the endorsement states that it's for a specific timeframe.

If you get a document that says it's an endorsement to your policy, compare it to your original policy declaration page and see what has changed or contact your insurance representative to make sure you understand the new document's consequences. 

One kind of endorsement commonly used for a limited term is a vacancy permit for a home under renovation. Without a vacancy permit, your homeowner's insurance coverage may be limited while no one is living in the home.

Types of Insurance Endorsements

Insurance endorsements can be additional documents added to your policy or replacements for your previous policy documents.

For example, say you change your address with your insurance company, and it sends an endorsement with the new address. The previous policy contract with the old address is no longer valid and the endorsement replaces the original contract document.

When an endorsement adds coverage, lists additional conditions, or adds restrictions or limitations following underwriting by the insurance company, it's typically done by adding documents to your policy. This is because the entire policy wording or contract isn't affected, only the specified new terms. The endorsement becomes an add-on to the policy and should be kept with the original document.

What Do Insurance Endorsements Cover?

Insurance endorsements can cover a wide range of situations. For example, if a couple is getting divorced, one spouse may request an endorsement to remove an ex-spouse from home or auto insurance policies. The spouse will receive new documents reflecting the appropriate owner.

A common example with homeowner's insurance is including endorsements for specific items. Valuable items like art and jewelry may be worth more than the coverage limits in a standard policy, so these items may have endorsements that better reflect their value. These changes will also increase your policy premiums.

Endorsements can also remove or limit coverage. For example, a homeowner's insurance policy may have an endorsement excluding certain types of water damage to your property. You could also increase your deductible and receive an endorsement reflecting the change. Your deductible is the amount you pay for covered losses before your policy starts coverage.

Do I Need an Insurance Endorsement?

If you have items of value or you've experienced a change to your home or business, you may need an endorsement. It's a good practice to review your insurance policies annually and ensure they meet your current needs. An experienced insurance agent can assist you in assessing whether you need an endorsement or a different type of policy.

Key Takeaways

  • An insurance endorsement is an amendment or addition to an existing insurance contract that changes the terms or scope of the original policy.
  • They can be issued during your policy term, at the time of purchase, or at renewal and they're legally binding amendments to an insurance contract. They may result in changes to your premium.
  • Endorsements remain in force until your policy expires and may renew under the same terms and conditions as the rest of your policy.
  • Endorsements can replace the current policy or be additional documents that are added to your current policy. 
  • They cover a range of situations, including taking insureds off a policy, changing addresses, or adding coverage for specific items.