Property and Casualty Insurance Practice Exam

Which type of documents may be added to an insurance policy to change its terms?

1. Endorsements

2. Applications

3. Contracts

4. Invoices

The correct answer is: Endorsements

Endorsements are written documents attached to an insurance policy that modify its terms, coverage, or conditions. These modifications can include adding or removing coverage, changing limits, or clarifying policy language. Endorsements are often used to adapt a policy to better fit the insured's needs or to comply with regulations or changes in circumstances. By utilizing endorsements, insurers can provide tailored coverage options while maintaining the original policy structure. In contrast, applications are the documents that individuals or businesses fill out when applying for insurance coverage, providing information that is used by the insurer to assess risk and determine premium. Contracts refer to the entire agreement between the insurer and the insured, outlining the rights and responsibilities of both parties. Invoices typically relate to the billing and payment for premiums and do not change the terms of the insurance policy itself.