The industry is currently facing a perfect storm of historically strong housing demand and sky-high labor and material costs. According to the conclusions of the National Association of Home Builders (NAHB), household construction costs are increasing. The cost increase is directly related to the increasing costs for building materials, especially the price of timber. According to NHB, costs increased by 340% from last year.
As of this summer, Bolder Insurance customers are likely to see homeowners with a higher average premium renewal. The inflation monitor component of a home policy increases every year to reflect the gradual increase in the cost of rebuilding a home, ensuring that homeowners continue to have adequate coverage. With the current inflation in the housing market, however, we expect that homeowners will experience a higher premium increase than normal.
The historically low mortgage rates and the Covid-10 pandemic have also contributed to more home sales and renovation projects causing an increased demand for building materials. Unfortunately, this demand has caused a shortage of supply throughout the construction industry, caused greater demand, lower supply and a huge increase in the price of building materials. Unfortunately, with a sharp rise in building materials and construction prices, this is likely to lead to higher homeowners insurance costs, making it more costly to repair or rebuild a home after a loss. As a result, homeowners may find that their current policy boundaries and coverage are no longer adequate.
It's so important for homeowners to respond and take some action:
– Review your policy . Make sure you understand your homeowner's policy. Does your insurance have compensation cost coverage or actual cash value coverage? Does your insurance provide a correct replacement cost or a total value for your home?
– Consider coverage adjustments . Contact one of our bolder insurance advisors to discuss whether your homeowner may need to adjust coverage, such as changing current limits, or getting specialized coverage or insurance.
– Keep your insurance advisers in "know" . Make sure you always contact Bolder Insurance when you have renovated or made improvements to your home (eg remodeling your kitchen, adding an extension, building a deck). Your insurance will probably need to be updated.
Our bolder advisors are available to answer all your insurance questions! Contact us today.
Disclaimer: Information and claims presented in this content are for informational, illustrative purposes only and should not be construed as legally binding.