What is the purpose of a signed endorsement in an insurance policy?

A signed endorsement in an insurance policy serves to formally change the terms of the policy. Endorsements are written amendments that can modify existing coverage, add new coverage, or specify exclusions. When an insurer or an insured party signs an endorsement, it indicates an agreement to the adjusted terms, thereby altering the original policy document.

In contrast, while endorsements might also clarify coverage conditions or potentially add additional coverage, their primary function is to effectuate changes in the policy’s terms. Premium adjustments related to those changes would typically not be a direct purpose of the endorsement itself but could be a consequence of the changes made. Therefore, the emphasis on changing the policy terms makes it the most accurate answer regarding the purpose of a signed endorsement.