April 15, 2022 April 15, 2022/ An endorsement is the signature of a payee on a check. This signature is written before the check is transferred to the payee’s bank. For example, a “for deposit only” endorsement ensures that the payee’s bank must deposit the funds into the payee’s account. If the endorsement is a blank endorsement (such as when it is made payable to Cash), the check becomes a negotiable instrument and can then be used by any other party. There are several types of endorsements that may be applied to a check, as noted next. Blank EndorsementThis is a simple signature, and does not specify the endorsee. It is the standard endorsement on the back of a check that is then cashed. When a blank endorsement is applied to order paper, it becomes bearer paper. For example, Seth Jones receives a check made out to him and writes his signature on the back of the check. He then loses the check, which George finds. George is now in possession of bearer paper, which only requires delivery for its negotiation. Deposit EndorsementThis is a statement “for deposit only,” making the endorsee the collection agent. The intent is to have the endorser deposit the instrument with that party’s bank. This is the signature of the endorser, as well as the name of the person to whom the instrument is to be paid (such as “Pay David Andrews”). A special endorsement creates order paper, which requires endorsement and delivery for its negotiation. April 15, 2022/ SKIP TO CONTENT
An endorsement is a form of public support or approval. Endorsements are given to politicians and products. If you give something an endorsement, you're basically saying "I approve of this person or product." Celebrities give politicians an endorsement if they think you should vote for them. When celebrities do commercials for products, those are also endorsements. If someone puts their fame or name behind something, they're endorsing it and giving their approval. That goes for checks, too: when you sign one you've just written, you've endorsed it.
Definitions of endorsement
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An endorsement, or "rider," can be used to add, delete, exclude, or alter coverage. It can be issued during your policy term, at the time of purchase, or when you renew the plan. It's a legally binding change to an insurance contract. For example, you may add an insurance endorsement to cover expensive jewelry or art that would not be covered by your regular homeowners' insurance policy. An endorsement is a policy change that can be added during the term without renewing the policy. Your premiums may change as a result of an endorsement. They're often used on property and casualty policies. Riders can also make changes to health and life insurance plans. They remain in force until your policy ends, and they may renew under the same terms and conditions as the rest of your policy. One exception is if the endorsement states that it's for a specific timeframe. If you receive a document that says it's an endorsement to your policy, compare it to your original declaration page to see what has changed, or contact your insurance representative to make sure you understand the new document's consequences.
One kind of endorsement commonly used for a short term is a vacancy permit for a home that's under renovation. Your homeowner's insurance coverage may be limited while no one is living in the home if you don't have this permit. Riders can be additional documents added to your policy, or they can replace your previous policy documents. Suppose you change your address with your insurance company. It sends an endorsement with the new address. The old contract with the old address is no longer valid. The rider replaces the original contract document. It's often done by adding documents to your policy when an endorsement adds something, when it lists extra conditions, or when it adds restrictions or limits after underwriting by the insurance company. This is because the policy wording or contract isn't changed, only these new terms. The endorsement becomes an add-on to the plan. It should be kept with the original document. Endorsements can cover a wide range of needs. One spouse may request a rider to remove an ex-spouse from home or auto insurance when a couple is getting divorced, The spouse will receive new documents showing the current owner. A common example with homeowner's insurance is including endorsements for certain items. Valuable items like art and jewelry may be worth more than the coverage limits in a standard policy, so these items may have riders that better reflect their value. These changes will also increase your premiums. Endorsements can also remove or limit coverage. A homeowner's insurance plan may have a rider excluding certain types of water damage. You could also increase your deductible and receive an endorsement showing that change.
Your deductible is the amount you pay for covered losses before your policy begins coverage. You may need an endorsement if you have items of value, or if you've experienced a change to your home or business. It's a good practice to review all your policies each year to ensure that they meet your current needs. Your agent can assist you in assessing whether you need an endorsement or a different type of policy.
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