Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 26, 2021

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Like every other business in the world, the insurance industry has its own unique language and thousands of acronyms only insurance geeks understand…insurance geeks like us here at TTAI.

That brings us to the term “insurance endorsement.”

The main thing to remember about the word “endorsement” is that it’s synonymous with the phrase “policy change.” Endorsements allow insurance companies to change your insurance premium part way through the cycle, effectively changing your insurance contract.

In short, any time you add to, take away from, or change the basic coverage on an insurance policy, you are “endorsing your policy.”

Endorsements can be requested at any time, but have to be approved and executed by the insurer or an agent with the proper authority in order to be “effective.” Depending on the insurance company, this may require an underwriter review.

When are additional coverages considered endorsements?

For example, let’s say you purchase a standardized homeowners insurance policy, but “endorse” it to include certain coverage types that are not part of the standardized package – standardized, meaning the average person does not need or typically feel obligated to purchase the coverage for their home.

Perhaps you want to add coverage for continuous and repeated leakage of water or foundation water damage coverage to the base policy. Similarly, you could increase your coverage in those areas or for more standard coverages like auto collision or comprehensive.

Either of those additions would be considered “endorsements” to the basic policy form.

There are usually over 20 such endorsements available on a basic homeowner’s insurance policy (what is covered under a homeowners insurance policy?).

You may have options to endorse your home’s policy to include earthquake insurance coverage, additional value for personal items (personal articles floater), or even golf cart liability coverage.

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When are changes treated as endorsements?

Any change made to a standard policy after it’s initially issued and effective is also referred to as an endorsement.

For example, you may need to endorse (add) a new vehicle onto your auto insurance policy when it’s purchased, which usually coincides with an endorsement to delete the vehicle you have sold or traded in.

[New Car Insurance Grace Period]

But personal insurance policies aren’t endorsed that often. Once you decide what coverage you are comfortable with there isn’t much left to work with during a policy term…maybe adding or deleting a car here or there, but nothing too major.

What kind of commercial insurance policy endorsement is common?

However, endorsements on commercial insurance policies tend to be much more common since businesses are generally more dynamic than our personal lives.

The bigger the company being insured, the more endorsements they’ll likely need. Many times, endorsements are necessary to establish plans that meet the needs of the unique business whether it be additional coverage for injuries or special coverage for merchandise or against certain threats.

Two of the most common are the additional insured and blanket additional insured endorsements.

Contact your insurance company or independent insurance agent if you need to add, remove, or change your coverage.

Tip: If you’re curious which endorsements you currently have, take a look at your declarations page.