Addendum

What Does Addendum Mean?

An addendum is an addition to an insurance contract that either increases or removes coverage for a specific circumstance. It is included when either the insurer or the policyholder feels the need to adjust the coverage. Once added, the addendum becomes legally binding, along with the original contract.

Insuranceopedia Explains Addendum

Addendums are available because not every standard insurance policy can meet the needs of every individual. Therefore, insurance companies often provide options to add or remove coverage. 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 desires it. Buyers comparing homeowners policies often need to know up front which natural disasters their plan already covers without an addendum, since the base policy on tornadoes and similar events varies a lot by state and carrier. It is worth checking your policy language to see if tornado damage is included in your homeowners coverage before paying for an addendum you may not need. How an insurer handles these optional additions is one of the things to look at when comparing top homeowners insurance companies. In cases like this, as well as others involving addendums, the individual’s unique circumstances often influence their decision.