What is an endorsement in insurance terminology?

An endorsement in insurance terminology refers to a written agreement that modifies the terms of an insurance policy. This can include expansion or limitation of the benefits provided by the policy. Endorsements are essential because they allow policyholders to customize their insurance coverage according to their specific needs. For example, a homeowner might add an endorsement to their policy to cover high-value personal property that exceeds standard coverage limits. Alternatively, endorsements can also reduce coverage for certain risks or scenarios that the insurer may want to exclude. This flexibility in policy management is an important aspect of insurance, ensuring that the policy remains relevant and effective for the insured.

The other concepts listed do not accurately represent what an endorsement is. For instance, a temporary contract providing proof of coverage pertains more to a binder rather than an endorsement, and investigating claims relates to claim adjusters rather than the alteration or modification of policy terms. Lastly, an assessment of vehicle damage is referred to as an appraisal, not an endorsement.