Property and Casualty Insurance Practice Exam

What term describes the documents that modify or change the original insurance policy?

1. Endorsement

2. Attachment

3. Addendum

4. Appendix

The correct answer is: Endorsement

The term that describes the documents that modify or change the original insurance policy is "endorsement." An endorsement provides specific alterations to the coverage or terms of the policy without the need for creating an entirely new contract. This can include adding new coverages, modifying existing coverages, or clarifying policy terms. Endorsements are an essential part of property and casualty insurance, as they allow for flexibility and customization in policy agreements to better align with the policyholder's needs or changes in circumstances. They function effectively as amendments to the policy, ensuring that all parties have an updated understanding of the terms of coverage. The other terms listed do not accurately capture this concept in the insurance context. For instance, "attachment" typically refers to a legal procedure related to liens or claims, "addendum" is more commonly used in legal or contractual documents to add supplementary information, and "appendix" usually relates to supplementary material at the end of a document. Thus, endorsement is the precise term for documents that modify or amend an existing policy.