What is an endorsement in an insurance policy?

An endorsement in an insurance policy refers to a document that modifies the coverage of that policy. This modification can either expand or limit the coverage provided by the original policy terms. Endorsements are used to add specific coverage features, remove certain exclusions, or clarify the terms of the insurance contract.

For instance, if a homeowner wants to add coverage for a swimming pool or business equipment in their home, an endorsement would be necessary to include that specific coverage. Similarly, if certain risks were previously included and need to be excluded, an endorsement can be used to formalize that change. This flexibility allows policyholders to customize their coverage according to their changing needs without having to purchase a whole new policy.

In contrast, the other options refer to different aspects of insurance but do not accurately describe what an endorsement is. For example, a type of insurance claim involves the process of requesting compensation from the insurer for a loss or damage, which is distinct from modifying policy terms. A policy's expiration notice is simply a notification that coverage is coming to an end and does not involve changes to the policy's terms. Lastly, a statement of exclusions outlines what is not covered by the policy, rather than modifying the coverage itself.