CIC Commercial Property Practice Exam

Question: 1 / 400

What advantage do 'inflation guard endorsements' provide in commercial property insurance?

They lower the premium rates over time

They increase coverage limits based on inflation

Inflation guard endorsements serve an important purpose in commercial property insurance by ensuring that coverage limits automatically adjust to keep pace with inflation. This means that as the cost of materials and labor increases over time due to inflation, the insurance coverage also increases accordingly. This adjustment helps to maintain the adequacy of coverage, so that in the event of a loss, the insured is more likely to receive sufficient compensation to rebuild or repair their property at current costs, rather than at the lower costs that existed when the policy was initially purchased. This feature is particularly beneficial in times of rising inflation, which can significantly impact the value of property and the cost of replacement.

Get further explanation with Examzify DeepDiveBeta

They eliminate deductibles during claims

They extend coverage to business interruption

Next Question

Report this question

Download CIC Commercial Property Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy