What is a primary function of an endorsement in an insurance policy?

An endorsement in an insurance policy serves as an amendment or addition that modifies the terms and conditions of the original policy. The primary function of an endorsement is to clarify coverage specifics, such as defining what is included or excluded, or to adjust the limits of coverage as needed. This clarification helps both the insurer and insured understand exactly what is covered under the policy, as well as any alterations that might affect claims processes or coverage decisions.

When an endorsement is applied, it may address changes in the risk, adjust coverage limits, or add new coverage options to suit unique circumstances. This can be particularly important in complex insurance scenarios where standard policy language may not provide enough detail.

While endorsements can sometimes change the cost of a policy or increase the insured value, their main purpose remains focused on the clarification of coverage, ensuring that all parties are on the same page regarding insurance provisions and any alterations to the original agreement.