Which optional coverage might Bob have included as part of his commercial property policy that increases the coverage limit upon renewal?

The inclusion of Replacement Cost as an optional coverage in a commercial property policy allows for increased coverage limits upon renewal. This is due to the fact that Replacement Cost policies cover the cost to replace damaged or destroyed property with new property of like kind and quality, without deducting for depreciation.

As time goes on, it is common for the replacement cost of property to increase due to inflation or changes in market value. Therefore, having Replacement Cost coverage ensures that the insured is more likely to have coverage limits that reflect the current value of replacing their property when the policy is renewed. This can be crucial for businesses to maintain adequate protection against potential losses, ensuring they can fully rebuild or replace essential assets without facing financial shortfalls.

In contrast, other options like Actual Cash Value offer coverage that takes depreciation into account, which does not typically adjust the coverage limit upwards at renewal. Extended Coverage usually refers to additional perils that can be covered but does not pertain to automatically increasing coverage limits. Simplified Cost is not a standard term generally associated with property policy coverages, making it less relevant in this context.