What is an endorsement in insurance terminology?

In insurance terminology, an endorsement is best defined as an addition that modifies or changes the original policy. Endorsements can be used to add coverage, exclude certain conditions, or alter specific terms of the insurance contract. This makes them a vital tool for policyholders seeking to customize their insurance to better fit their needs.

For example, if a homeowner wants to add coverage for a specific high-value item, such as fine art or jewelry, they would request an endorsement to their homeowners insurance policy to specifically cover that item. This flexibility allows for tailored solutions, accommodating the policyholder's unique circumstances and risks.

The other options do not accurately capture the essence of an endorsement. A summary of policy conditions relates to the overall terms of the policy rather than modifications; a renewal of an expiring policy indicates a continuation of coverage rather than a change; and a cancellation of the policy denotes termination rather than an addition or modification. Understanding endorsements is crucial for recognizing how policies can be adjusted over time to meet changing needs or preferences.