What is the purpose of the Inflation Guard Endorsement?

The purpose of the Inflation Guard Endorsement is to adjust the limits of insurance for inflation annually. This endorsement ensures that as the cost of living and construction rise over time, the insurance coverage reflects those increases. Without this adjustment, a property may be underinsured as rebuilding costs can escalate significantly due to inflation. This is particularly crucial in property insurance, where replacement costs can sharply rise, leaving the insured inadequately covered if they have not taken inflation into account.

By incorporating this endorsement, policyholders can maintain their coverage levels in line with actual replacement costs, reducing the risk of financial loss in the event of a covered claim.