Endorsement
An endorsement (also called a rider) is a written amendment attached to an insurance policy that modifies, adds, or removes coverage from the original policy terms.
Exam Tip
Endorsement = written modification to policy. Overrides conflicting base policy terms. Called "rider" in life/health. Can add, remove, or modify coverage.
What is an Insurance Endorsement?
An endorsement is a legal document that modifies an existing insurance policy. It can add coverage, remove coverage, or change policy terms. Once attached, the endorsement becomes part of the insurance contract and takes precedence over conflicting provisions in the original policy.
Types of Endorsements
| Type | Description | Example |
|---|---|---|
| Standard Endorsement | Pre-approved forms from ISO | Inflation guard endorsement |
| Manuscript Endorsement | Custom-written for specific needs | Unique business coverage |
| Additional Coverage | Adds protection not in base policy | Scheduled jewelry rider |
| Exclusion Endorsement | Removes specific coverage | Earthquake exclusion |
| Modification Endorsement | Changes existing terms | Higher liability limits |
Common Property/Casualty Endorsements
| Endorsement | Purpose |
|---|---|
| Inflation Guard | Automatically increases dwelling coverage |
| Scheduled Personal Property | Covers specific valuable items |
| Water Backup | Covers sewer/drain backup damage |
| Home Business | Extends coverage to home-based business |
| Identity Theft | Covers identity restoration expenses |
Common Life/Health Endorsements (Riders)
| Rider | Purpose |
|---|---|
| Waiver of Premium | Waives premiums during disability |
| Accelerated Death Benefit | Advances death benefit for terminal illness |
| Guaranteed Insurability | Allows future coverage without medical exam |
| Accidental Death Benefit | Pays additional benefit for accidental death |
| Child Term Rider | Provides term coverage for children |
How Endorsements Work
| Step | Action |
|---|---|
| 1 | Policyholder requests change |
| 2 | Insurer evaluates and approves |
| 3 | Written endorsement issued |
| 4 | Premium adjusted if applicable |
| 5 | Endorsement attached to policy |
Endorsement vs. Base Policy
| Aspect | Base Policy | Endorsement |
|---|---|---|
| Scope | Broad coverage terms | Specific modifications |
| Priority | Default terms | Overrides conflicting base terms |
| Duration | Full policy term | May be limited or full term |
| Cost | Base premium | May increase or decrease premium |
Premium Impact
| Endorsement Type | Premium Effect |
|---|---|
| Adding coverage | Usually increases premium |
| Removing coverage | Usually decreases premium |
| Modifying limits | Varies based on change |
| Cosmetic changes | No premium impact |
Exam Alert
Endorsement = written document that MODIFIES an insurance policy. Takes PRECEDENCE over conflicting base policy terms. Also called a "rider" in life/health insurance. Standard endorsements use ISO forms; manuscript endorsements are custom-written.
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Related Terms
Rider (Insurance)
InsuranceA rider is an optional add-on to an insurance policy that provides additional benefits or modifies coverage for an extra premium, allowing policyholders to customize their protection beyond the base policy.
Premium (Insurance)
InsuranceAn insurance premium is the amount paid by the policyholder to the insurance company for coverage, typically paid monthly, quarterly, or annually.
Exclusion
InsuranceAn exclusion is a policy provision that specifies conditions, circumstances, or types of losses that are not covered by an insurance policy, eliminating the insurer's obligation to pay for those particular claims.