What Is Endorsement and Why Is It Necessary in Car Insurance?

What Is Endorsement and Why Is It Necessary in Car Insurance?

Car insurance is a regulatory requirement for all car owners. The Motor Vehicles Act of 1988 makes it compulsory to have one. This comes alongside the obligation to have a valid registration and PUC certificate when buying a car.

Often car insurance policies are bought in a haste. While some people only purchase it with an intention to comply with the law, others are keen on looking for the best coverage. In this process, there can be errors or slip-ups which result in wrong information being reported to the insurance company. These errors can lead to rejection of your claim too. To avoid such problems, it is best to get it changed with your insurer. This can be done using the endorsement facility.

Meaning of endorsement in car insurance

Endorsement is the facility to update your policy information and the terms of the contract. This document is in addition to your originally issued car insurance policy. Here, any additions, deletions, or other forms of alteration in your policy are recorded. These changes can be required due to either change of certain details, personal or vehicle-related, that needs reporting to the insurance company or even change in the policy coverage. Once you receive the endorsement letter from the insurance company, it is necessary for you to carry both, the original policy as well as such endorsement letter as they make up the entire policy document.

Limits on endorsement

There is a common misconception that the endorsement in your vehicle insurance policy can be done a limited number of times, however, that isn’t the truth. These changes by way of endorsement can be requested any number of times. There is no restriction by the regulator or either by the insurer on how many changes can be incorporated. But it isn’t advisable to make frequent changes. Recurring changes often results in confusion on the latest and update policy terms, both for you as well the insurance company. To stay clear of such mix-ups, it is advisable to make the changes that are an absolute necessity only.

Situations where endorsement can be used

Every general insurance policy for a vehicle can be amended using this endorsement facility. This facility helps to amend the necessary details in your policy coverage and policy information making the claim process hassle-free. Change or updating of personal details like name, address, contact number, change or correction of vehicle details like the engine number, chassis number, fuel input, modification of the insurance coverage, loading add-on covers, opting for deductibles are some of the situations where an endorsement comes handy.

Impact on premiums due to endorsement

Not all endorsements made impact your premiums. Only those changes that either increase or decrease the policy’s scope influence the premium of your policy. For example, changes where engine modification is carried, have an impact on the IDV of your car insurance policy. These kinds of changes result in impacting the premiums due to endorsements made. However, corrections or changes in any personal details like name, address, or other specifics do not witness any changes in premiums.

This is how endorsement comes in handy to correct or amend your policy coverage. To estimate the impact of your amendment, you can make use of a car insurance calculator too. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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