How does an endorsement modify an insurance policy?

An endorsement modifies an insurance policy by changing the terms or coverage of an existing policy. This means that endorsements serve as official amendments that are used to add, remove, or alter provisions in the original insurance contract. For instance, an endorsement may extend coverage to include additional risks, change the limits of liability, or specify exclusions that were not included in the original policy. These modifications are crucial for ensuring that the policyholder's coverage reflects their current needs or situations without the need to completely rewrite the insurance policy.

This flexibility benefits both insurers and insureds by allowing adjustments based on changes in circumstances, such as acquiring new property or changes in legal requirements. This process is an integral part of how insurance policies can evolve over time to remain relevant to the policyholder's needs.