Georgia Property & Casualty Practice Exam

What endorsement should Jerry and Juliet seek to ensure their dwelling coverage keeps pace with increasing value?

1. Automatic increase in insurance endorsement

2. Deflation guard endorsement

3. Dwelling under construction endorsement

4. No-deductible provision

The correct answer is: Automatic increase in insurance endorsement

To ensure their dwelling coverage keeps pace with increasing value, Jerry and Juliet should seek the automatic increase in insurance endorsement. This endorsement is specifically designed to adjust the insured amount for dwelling coverage automatically over time, usually tied to an index or predetermined percentage. As property values can rise due to inflation, market demand, or improvements, this endorsement helps maintain adequate coverage without the need for the policyholders to request adjustments themselves. The other options do not serve the purpose of adjusting coverage to keep pace with property value increases. The deflation guard endorsement is focused on protecting against depreciation rather than increasing coverage. The dwelling under construction endorsement is applicable for homes that are being built or renovated, providing coverage during the construction phase. The no-deductible provision simply refers to eliminating deductibles for certain claims and does not impact how coverage is adjusted over time. Thus, the automatic increase in insurance endorsement is the most suitable choice for maintaining adequate dwelling coverage in line with increasing property values.