If you wanted to obtain an endorsement that automatically updates the level of property coverage based on an index of replacement costs that continually updates the cost of building a home,you would ask for a(n)
A)inflation guard.
B)automatic adjustment policy.
C)replacement cost index.
D)continual adjustment policy.
E)none of the above.

Question

Quizplus · Accepted Answer

An inflation guard endorsement is designed to automatically adjust the amount of coverage on a property to reflect increases in the cost of construction materials and labor due to inflation. This type of endorsement uses an index that continually updates the cost of building a home, so that the coverage amount stays current with the replacement cost of the property. Therefore, option A is the correct choice. Options B, C, D, and E are not appropriate because they do not accurately describe the type of endorsement that automatically adjusts coverage based on the cost of building a home.

If You Wanted to Obtain an Endorsement That Automatically Updates