What is an "endorsement" in an insurance policy?

An endorsement in an insurance policy is a written amendment that modifies the coverage, terms, or conditions of the policy. Endorsements are used to add, remove, or change specific aspects of the insurance contract without the need to create a completely new policy. This could involve expanding coverage to include additional risks, adjusting the limits of coverage, or clarifying policy language.

For instance, if a homeowner wants to add coverage for a newly purchased valuable piece of art, an endorsement would be added to the existing homeowners' policy to provide that specific coverage. Endorsements play a crucial role in customizing insurance policies to better fit the policyholder’s needs while ensuring that any changes are documented and legally recognized.

In contrast, other options refer to different aspects of insurance: a separate insurance policy for high-value items is not an endorsement but an independent policy; a premium payment plan refers to how premiums are paid and does not amend the policy itself; and a summary of the claims process describes how to report a claim, rather than altering the coverage or terms of the insurance contract.