Understanding Insurance Endorsements

(Get all your answers from an expert.)

Frequently Asked Questions

What is an Insurance Endorsement
What is an Insurance Floater?
What is the Difference Between the Two?
Expert(s) Who Answered

What is an insurance endorsement?

I keep hearing about insurance endorsements. I’ve never seen the word “endorsements” used that way and I was wondering what it means. Could you explain?

Insurance endorsements can be confusing insurance industry jargon. The meaning is pretty simple, though. An insurance endorsement is an addendum (a.k.a. addition or change) to an insurance contract.

All insurance is based on contracts. You sign up to pay premiums and to follow certain terms. The insurance company signs up to pay to cover situations like car accidents and house fires if they happen. An endorsement is just a modification or extra thing added to that contract.

Endorsements are added before you sign or renew your policy. They’re not added while your policy is ongoing. If you have questions about what endorsements are in your policy, an independent insurance agent can go over the policy with you before you sign it.

Examples of possible insurance endorsements include:

  • Peak season endorsement: Allows you to temporarily increase coverage during the peak season for your business such as summertime for vacation-oriented businesses or Christmas for retail businesses
  • Conditional endorsement: Specifies conditions that need to be met before you’re fully covered. For example, a conditional endorsement for homeowners insurance could state that your homeowners insurance won’t cover trampoline accidents.
  • Clarifications: Some endorsements are there to make the contract clearer. They may specify coverage you didn’t know you had or otherwise make things easier for you.

What is an insurance floater?

I’m buying inland marine insurance for my business and everyone keeps mentioning insurance floaters. What’s a floater? Is it good or bad?

An insurance floater is just jargon. It means the same thing as an insurance endorsement. Just like an endorsement, an insurance floater is a modification to your insurance contract that clarifies, adds or subtracts coverage.

It’s no surprise that you’re seeing it while buying inland marine insurance, since the term “floater” has its origins in that type of insurance. Inland marine insurance is designed to cover equipment that moves, or “floats,” around  such as an expensive camera or a golf cart.

You’re more likely to see the term “floater” (as opposed to “endorsement”) in reference to things that move around. For example, floaters that cover valuable belongings prone to theft—like fur coats, precious metals or fine jewelry—are common in homeowners insurance.

What is the difference between an insurance endorsement and an insurance floater?

Insurance endorsements and insurance floaters sound exactly the same to me! What’s the difference? Is there even a difference?

The only difference between insurance endorsements and insurance floaters is the name. They both mean the same thing—they’re an addition to your insurance contract that’s intended to clarify coverage.

Which term you’re more likely to see depends on what type of insurance you’re dealing with. For example, in life insurance an insurance endorsement is typically called an insurance rider instead. There’s different jargon in different fields, but it all means the same thing.

Hopefully that helps you understand insurance endorsements and floaters better. If you have questions about what endorsements are included in your insurance policy specifically, you can speak to an independent insurance agent for an expert opinion on your situation.

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