What is the difference between endorsements and riders in insurance?

The correct answer identifies that both endorsements and riders are tools used to modify insurance contracts, emphasizing that endorsements are typically associated with property policies.

Endorsements are amendments or additions to an existing insurance policy that alter the terms or coverage provided by that policy. They can either add new coverage, change the terms, or exclude certain events or items. Endorsements are frequently used in property insurance to tailor a policy to fit specific needs or circumstances of the insured, making them versatile tools for policy customization.

On the other hand, riders are primarily modifications added to life insurance policies. They often provide additional benefits or change certain aspects of the life insurance contract, such as adding a benefit for critical illness or accidental death. While riders can enhance or expand coverage, they don't typically apply to property insurance policies in the same way endorsements do.

Understanding this distinction is critical for anyone dealing with different classes of insurance, as it highlights how various modifications serve distinct purposes across insurance types.