What best defines the term "endorsement" in insurance?

The term "endorsement" in insurance fundamentally refers to an attachment or amendment to an insurance policy that modifies, adds, or clarifies coverage or terms in the original policy. It serves as a means to document any changes that need to be made, whether that involves adding new coverages, altering existing terms, or making specific exclusions.

For instance, if a policyholder wants to add personal property to their homeowner's policy, the insurance company would issue an endorsement that outlines the new coverage specifics and adjusts the policy accordingly. This ensures that the changes are legally recognized within the terms of the insurance agreement.

Understanding endorsements is critical because they can significantly impact the coverage provided by the policy, making it essential for both insurers and policyholders to accurately manage and understand these amendments. This distinguishes endorsements clearly from other concepts such as increasing coverage limits, which could also involve endorsements but is not the core definition itself. Similarly, endorsements are not related to claim denial procedures or fraud, as those pertain to different aspects of the insurance process altogether.