No one wants to think about needing enough coverage to rebuild their home. Unfortunately, homeowners insurance coverage amounts are based on just that. Over the past year, the U.S. has experienced an unprecedented increase in the cost of construction material and labor. These rising costs impact the cost to repair or replace property risks.
In other words, if you don’t have enough coverage on your policy, there could be problems when you file a claim. Luckily, we are here to help! We can help you calculate the coverage you need based on the inflated costs.
Total reconstruction costs, including materials and retail labor, increased 9.2% from October 2019 to October 2020, countrywide. Lumber costs were even more extreme, seeing a 59.7% increase, reflected by an increase in building activity and supply shortages stemming from the shutdowns related to the Covid-19 pandemic. Additionally, the following “costs” have also increased:
- Carpet – 6.5%
- Interior Trim – 3.1%
- Drywall – 2.4%
If you haven’t gotten your replacement cost estimated over the last year, it’s definitely time. Imagine a worst-case scenario house fire where you need to rebuild your entire home. If you haven’t taken the increased cost of labor and materials into consideration, you could be underinsured and not have enough to cover the construction.
According to our carrier, Travelers, “If you don’t think your home could be underinsured, think again. A recent study* [showed], 64 percent of homeowners are underinsured by an average of 18 percent. For families with a home that costs $300,000 to rebuild, that equates to a shortfall of $54,000! Unfortunately, homeowners with inadequate coverage don’t know until it’s too late.” What’s too late? Finding out you don’t have enough coverage to rebuild your home after a claim event.