Insurance Endorsements

Anyone who has insurance coverage knows that the insurance contract is essential. It's important to understand your policy at the time of purchase to ensure you're adequately protected.

Insurance endorsements work to change your insurance policy and adjust your coverage. This usually means the policyholder adds or modifies coverage. Learn more about one crucial insurance policy document — an insurance endorsement.

Insurance Endorsements Defined

An insurance policy endorsement is a supplement or additional document attached to the insurance contract. It's a legally binding change to an insurance policy. The endorsement indicates policy changes to the existing policy. It serves to amend the original policy in some way. Endorsements are also called insurance riders, riders, insurance endorsements, or amendatory endorsements.

An endorsement can do any of the following:

• Increase coverage
• Decrease coverage
• Change names on the policy
• Update an address on the policy to add or remove locations

To understand the effect of an endorsement, it's helpful to understand the anatomy of your insurance policy. Your policy includes:

• A Declarations Page: Contains all the critical features of the policy, including type of insurance, policy term, coverage limits, and deductible
• The Insuring Agreement: Spells out the coverage options, what the policy covers (acts or perils)
• The Exclusions and Conditions Page: Defines what conditions must be present for the insurance policy to apply

Endorsements are amendments that change some part of the above sections of the insurance policy. Endorsements can serve a variety of functions, including:

• Exclusions: Some endorsements exclude coverage for certain types of claims.
• Additional Coverage: Other types of endorsements add back in coverage that would otherwise be excluded.
• Modification of Coverage: Endorsements can expand the scope of existing coverage.
• Editorial Changes: Clarify the intent of the policy without altering the coverage
• Administrative Changes: Change details like a mailing address or correct the spelling of a name

Endorsements apply to policies for property coverage and casualty insurance. Property and casualty insurance includes:

• Homeowners insurance policies
• Renters insurance policies
• Auto insurance policies

An amendment to a life insurance policy is called a rider. A common insurance endorsement is a scheduled personal property endorsement. A policyholder uses scheduled personal property coverage to add coverage for specific types of belongings, such as engagement rings or expensive artwork.

A standard homeowners, condo, or renters policy offers only restricted coverage for certain belongings. Endorsements can help close any gaps in coverage a particular policyholder requires.

Standard vs. Nonstandard Endorsements

An insurance endorsement can be either standard or nonstandard. A standard insurance endorsement is a pre-drafted document that an insurance service organization issues. These are popular among insurance providers because they are readily available.

Standard Endorsements

Examples of standard endorsements include:

• Name changes
• Address changes
• Flood endorsement
• Earthquake endorsement
• Sewer backup endorsement
• Identity theft endorsement
• Additional insured endorsement

Standard endorsements cover common issues that can be easily applied to your policy. Asking your insurance agent is the best way to request an endorsement. You can do so at any time.

Nonstandard Endorsements

The insurance company drafts nonstandard endorsements. The insurer can draft an endorsement for a particular situation when no standard endorsement is available. Most policyholders won't require a nonstandard endorsement.

An insurance service organization can customize a standard template to create a nonstandard insurance endorsement. Manuscript endorsements are endorsements drafted for single use on a specific policy. An attorney can determine whether a nonstandard endorsement would benefit you.

Mandatory vs. Voluntary

An endorsement can be either a mandatory endorsement or a voluntary endorsement. Some types of endorsements are added to the policy voluntarily. The insured party can request the add-on. A policyholder can decide to increase coverage through an endorsement. The majority of endorsements are voluntary endorsements.

For example, you could add more medical payment coverage to a car insurance policy. You could remove particular coverage, such as requesting an asbestos exclusion from general liability insurance. Or, you could buy an endorsement to include water backup coverage to supplement a home insurance policy. There are any number of possibilities.

Other types of endorsements are mandatory, and the policy must include them. If you live in a high-risk flood area, you may need flood insurance. State law requires some endorsements. For example, some states require an endorsement that makes the cancellation condition in a standard policy for general liability more stringent. Another example of a mandatory endorsement would be to increase the notice you must give your insurance company before canceling coverage.

Workers' compensation is an excellent example of policies that often contain endorsements. These policies often include one or more standard endorsements published by the National Council on Compensation Insurance (NCCI). These policies can include state-specific endorsements drafted by the insurance department in your state.

You can renew endorsements when you renew the policy. Contact your insurance agent or insurance company if you have questions about endorsement options. If you need further help, you may need to get legal help.

Get Legal Help With Endorsements

Legal issues can arise out of the interpretation of endorsements. If you are in a dispute with your insurance company about interpreting your insurance contract, consider getting legal advice. FindLaw can help you find an experienced insurance lawyer to help with your insurance case.