a document added to an insurance policy that may be requested by you or the insurer to limit or add to the coverage, or to clarify policy terms and conditions.
Amendatory Endorsement Details
In general, an amendatory endorsement, also known as a rider, modifies the insurance by adding coverage or specifies additional conditions or restrictions to the insurance policy at no extra cost. You can think of it as a provision to your contract that’s issued and mailed to you by the insurance company so you can attach it to the primary policy documents.
An Amendatory Endorsement can be provided at the time of insurance purchase, while the insurance is active, or at the time of its renewal. It remains in force until the policy expires unless it states a certain time period. It may also increase your premiums (the amount of money you pay for your insurance monthly or annually) and your deductible (the amount of money you pay out of pocket when you make a claim). Some policyholders add an endorsement that guards them against inflation. This will automatically increase your insurance by a certain percentage each year so your insurance doesn’t depreciate.
Endorsements can cover a very wide range of situations that arise in your daily life, like:
- A couple is getting divorced and one of the spouses needs to remove the other from home or car insurance policies.
- You need specific insurance for valuable items (e.g. jewelry or electronic equipment).
- You need added protection and your coverage limits increased when your property isn’t insured against certain types of damage (e.g. tree growing)
- You need to remove a beneficiary from your life insurance policy.
- The insurer issues it to exclude certain types of damage to the insured property.
Amendatory Endorsement Example
When you move to a different address, you will need to contact your agent to let them know that you've moved. Your insurance company will need to mail you an endorsement with the new address. The policy contract with the old address won’t be valid any longer and the endorsement will replace the original contract.
Right before you moved, you received a 24 karat gold chain. You need to take out insurance on it in case something happens during the move. Fortunately, you already have an insurance policy for a few other valuable items, you just need to add the chain. The insurance company sends you two amendatory endorsements, one for the move and one for the chain. You will have to pay an extra $50 a month on your premium, but you're now covered should something happen to it.
Types of Amendatory Endorsement
Below are some other names you may come across for amendatory endorsements.
- Special: an endorsement that removes the assumed omission of coverage (e.g. home insurances usually don’t include mold damage).
- Industry-specific: an endorsement that will cover items that are valuable and handy in your line of business.
- Hired and Non-Owned Auto: an endorsement that provides protection against damage of vehicles that your business doesn’t own. This could be a useful endorsement for delivery and currier driver.
In addition, endorsements may be standard (when the endorsement issuing is mandatory), non-standard, and hybrid. Standard endorsements include pre-printed policy terminology, while non-standard uses flexible manuscript language.