What is an endorsement in the context of an insurance policy?

An endorsement, in the context of an insurance policy, is defined as a document that modifies the terms of the existing policy. This can include adding coverage, changing the limits of the policy, or altering some of the provisions within the original contract. Endorsements are important because they allow policyholders to adjust their coverage to better fit their individual needs or changes in their circumstances without having to purchase an entirely new policy.

For example, if a homeowner wants to add coverage for valuable personal property like jewelry or art, they can request an endorsement to their existing homeowner's policy that specifically includes this additional coverage. This flexibility is a key aspect of how insurance policies can adapt over time.

Other choices do not align with this definition. The role of a legal entity that represents the insurance company pertains more to the duties of an agency or broker. An additional policy holder is simply someone who is named in the policy alongside the primary holder, while a type of risk assessment method would refer to the processes used to evaluate risk, not a modification of the policy itself.