Which statement about endorsements and riders is incorrect?

• A. An endorsement is a policy modification.
• B. A rider is a separate policy issued for additional coverage.
• C. Endorsements can add or modify coverage limits, exclusions, or covered risks.
• D. Riders attach to a policy to add or modify coverage terms.

Answer: (B)

Endorsements and riders modify an existing policy rather than creating a separate contract. They attach to the current policy and change its terms, whether by widening coverage, adjusting limits, or altering exclusions, all within the same policy framework. The statement that a rider is a separate policy issued for additional coverage is incorrect because a rider is intended to add or modify coverage under the existing policy, not stand alone as a separate policy. For example, adding a rider to a life insurance policy to provide accidental death benefits expands the coverage without issuing a separate policy. The other statements align with this idea: an endorsement is a policy modification, endorsements can add or modify coverage limits, exclusions, or covered risks, and riders attach to a policy to add or modify coverage terms.