What is the main purpose of an insurance endorsement?

The main purpose of an insurance endorsement is indeed to modify the coverage or terms of the original policy. Endorsements are used to add, remove, or change aspects of an insurance policy without needing to write a completely new policy. This can include increasing coverage limits, excluding certain types of risks, or adding new types of coverage that weren't included in the original policy.

By using endorsements, policyholders can tailor their insurance policies to better meet their specific needs or circumstances, ensuring that they maintain adequate protection as those circumstances change. This flexibility is a critical aspect of insurance products, allowing both insurers and insureds to adapt coverage as necessary.

The other options do not accurately reflect the primary function of endorsements. Reducing premium costs generally involves rating and underwriting adjustments rather than endorsements. Transferring a policy to another insurer typically requires a new policy rather than a modification of the existing one. Cancelling an existing policy is a separate action that doesn't involve endorsements, which are meant to refine and enhance the current policy rather than eliminate it.