What Is an Insurance Endorsement?

by Stephanie Tallman Smith

An insurance endorsement is an added provision to a policy that changes the policy’s terms or conditions. Common types of endorsements add coverage for special events, name additional parties to the policy or restrict coverage based on specific criteria. Endorsements are a legally binding change to a policy and should be kept with the original policy documents.

Additional Coverage

Endorsements adding coverage are common in the automotive, homeowner and life insurance industries. Owners of classic autos may obtain endorsements covering the restored value of the car, as opposed to typical depreciated values. Rental car coverage is another standard auto policy endorsement. A homeowner’s policy might contain an endorsement for earthquake or mold coverage. Life insurance companies offer endorsements that provide extra coverage for lost limbs or accidental death. Depending on the level of coverage, additional endorsements may increase a policy’s annual premium.

Limited Coverage

Some endorsements reduce the amount of coverage under a policy by limiting certain losses or restricting use. Auto insurance policy restrictions may include not covering certain drivers or only providing liability coverage for collisions where the insured person is found to be at fault. Life insurance policies may limit death benefits for accidents occurring during activities listed as dangerous or prohibited on the endorsement. Homeowner policy endorsements typically limit coverage on losses caused by a failure to maintain the property or things considered normal wear and tear.

Additional Insured

An “additional insured” endorsement adds another person or entity to the insurance policy. Most common on general liability insurance policies, businesses may ask contractors or consultants working in their facilities to add the business as an additional insured on the contractor’s policy. Should the contractor cause any damage to the facility, the business can file a claim with the contractor’s insurance company instead of their own. Special event locations and rental agreements will also ask to be named as an additional insured by the person renting the venue, such as large bridal parties, concerts or sporting events. This covers any damage caused by the special event.

Endorsements Change the Policy

Any insurance endorsement is a change to your insurance policy. The endorsement will be detailed on a separate page to the policy documents and must be signed by an authorized representative of the insurance company to be valid. Endorsements that are listed on the Certificate of Insurance or the Declarations page of the policy but not attached as a separate page are not legally binding. Always be sure to have a signed endorsement page and keep the endorsement with the original policy documents.

About the Author

Stephanie Tallman Smith is a lifestyles, business and real estate writer with over 20 years experience as a government analyst. She holds a Bachelor of Arts degree in management from Kaplan University and advanced certifications in public speaking, large group training and facilitation. Able to write about diverse subjects, Smith also writes extensively about family issues and home improvement.

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