Insurance Endorsement (Policy Change)

An insurance endorsement is a policy change which amends the existing insurance contract which changes the terms or scope of the original policy. An insurance endorsement can add, delete, exclude or otherwise alter coverage of the policy. An insurance endorsement will be issued in the middle of the policy term. It is a legally bound amendment to the policy.

Purpose
An insurance endorsement is a policy change which offers options to insureds to add coverage or increase coverage limits, but insurers may also issue special endorsements to limit or restrict coverage. Endorsements are used in property and casualty insurance. It can be issued on home, renters, condo, automobile and watercraft insurance policies.

Validity of endorsement
An insurance endorsement remains in force until the expiry of the policy and may renew under the same terms and conditions as the rest of your policy since it is legally bound with policy contract. It can be invalid if it specifies a term.

Effect on Premium using endorsement
1. Additional Premium
Additional Premium type endorsement is used when an insurer adds or increases the coverage of the policy.
For example, If the insurer adds a vehicle to the policy then the premium of policy will also be added to the policy. These premium are called an additional premium.

2. Return Premium
Return premium type endorsement is used when an insurer limits or deletes the coverage of the policy.
For example, If the insurer removes a vehicle from the policy then the premium of policy will also get reduced from the policy and the remaining amount will be paid to the insurer. These Premium are called as additional Premium.