Which endorsement provides automatic increase in dwelling coverage by a fixed percentage?

Which endorsement provides automatic increase in dwelling coverage by a fixed percentage?

• A. Personal liability supplement
• B. Broad theft coverage
• C. Inflation guard provision
• D. Dwelling under construction

Answer: (C)

Inflation guard provision is the endorsement that automatically raises the dwelling limit by a fixed percentage, usually at each renewal, to keep pace with rising construction costs and general inflation. This helps ensure the policy’s dwelling coverage remains adequate so a replacement cost claim isn’t paid below the actual cost to rebuild. Other endorsements like a personal liability supplement focus on liability limits, broad theft coverage expands theft-related protections, and dwelling under construction applies while the home is being built—none of which automatically increase the dwelling limit.

Inflation guard provision is the endorsement that automatically raises the dwelling limit by a fixed percentage, usually at each renewal, to keep pace with rising construction costs and general inflation. This helps ensure the policy’s dwelling coverage remains adequate so a replacement cost claim isn’t paid below the actual cost to rebuild. Other endorsements like a personal liability supplement focus on liability limits, broad theft coverage expands theft-related protections, and dwelling under construction applies while the home is being built—none of which automatically increase the dwelling limit.