What is the inflation-guard endorsement?

Endorsement
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What is the inflation-guard endorsement?

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Most policyowners purchase enough insurance to cover at least 80% of the replacement cost of their home. By purchasing this much insurance, the policyowner can avoid any coinsurance penalties that otherwise might apply under Coverages A and B. However, many policyowners forget to increase their policy limits as the value of the home appreciates. An inflation-guard endorsement can be added to your homeowners policy which will instruct the insurance company to automatically raise your policy limit at each policy renewal according to some predetermined index of local home values. Policyowners should be careful, however, to make sure that the index used by your insurer matches the rate at which home values are rising in your neighborhood.

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