An addendum is an addition to an insurance contract that either adds or removes coverage for a particular circumstance. It is included if either the insurer or the policyholder feels the need to adjust coverage. Once added, it too becomes legally binding, along with the original contract.
Addendums are available because not every standard insurance policy can cover the needs of every individual. Thus, insurance companies often have options to include more coverage or to remove some. For example, many standard property insurance policies do not cover acts of God, such as tornadoes. However, many property insurers offer addendum options to include this type of coverage if the policyholder wants it. In this case and in others involving addendums, the individual's unique circumstance likely affects their decision.
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