Policy confusing? Ask Poli.
Why did my dwelling coverage go up on its own?
An automatic increase provision adjusts Coverage A each term, and several other numbers in the policy move with it.
What filed forms generally say
Inflation-guard wording raises the dwelling limit at each renewal by a stated percentage or by an index tied to local construction costs.
Because other coverages are usually written as percentages of Coverage A, other structures, personal property and loss of use all rise at the same time.
Percentage deductibles rise too, which means a higher dwelling limit can increase your out-of-pocket amount in the same term it increases your premium.
The provision is meant to keep the home insured to value, since replacement-cost settlement in many forms depends on carrying a limit at or above a stated percentage of replacement cost.
Why your policy can still say something else
The percentage or index used, and which coverages are derived from Coverage A, differ by form and by endorsement.
Clauses to look for in your own document
- Inflation Guard / Automatic Increase in Insurance
- Declarations — Coverages and Limits
- Loss Settlement
- Deductible
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PoliSays explains document wording. It is not an insurer, broker, or law firm, and nothing here is advice.