قالب وردپرس درنا توس
Home / Insurance / Triple-I blog | As construction costs increase, consider your homeowners’ coverage

Triple-I blog | As construction costs increase, consider your homeowners’ coverage



By Max Dorfman, research writer, Triple-I (2022-07-1

4)

Construction and maintenance costs for housing are increasing, and homeowners should take these trends into account in their insurance decisions – especially when risks related to weather and climate increase.

Rising interest rates and persistent disruptions in the building materials supply chain can affect repair and compensation costs for homeowners’ insurance. However, a recent survey by the American Property Casualty Insurance Association (APCIA) showed that about two-thirds of insured homeowners could be without significant additional coverage – including automatic inflation monitoring, increased compensation costs and coverage for building regulations / ordinances – that could more effectively protect their investment.

“Inflation, recent supply chain problems, and increased demand for skilled labor and building materials following unparalleled natural disasters over the past two years have contributed to a significant increase in the cost of rebuilding homes and businesses,” said Karen Collins, Vice President of Personal Affairs. lines on APCIA. “It is imperative that homeowners review and, if necessary, update their insurance before the hurricane season to keep pace with rising costs.”

Most homeowners’ insurance policies today cover compensation costs for structural damage, but it is wise to check your insurance – especially if you have an older home. A compensation cost policy will pay for the repair or replacement of damaged property with materials of a similar nature and quality.

The limits for your insurance are usually shown on the declaration page under section I, Coverage, A. Housing. Your insurer will pay up to this amount to rebuild your home. If the limits of your homeowner’s policy have not changed since you bought your home, you may be underinsured – even if you have not made any upgrades.

Many insurance policies include an “inflation watch” clause that automatically adjusts the limit to reflect current construction costs in your area when the insurance policies are renewed. If your policy does not include this clause, see if you can purchase it as a recommendation.

Increasing the threat and potential costs is the steady increase in natural disaster losses in recent decades. This year’s Atlantic hurricane season is expected to be “well above average”, and forest fires start earlier, cause major losses, occur in more states and take longer to subside.

Triple-I provides tips on how to properly insure your home for a disaster – which is all the more important given current market conditions and the escalating threat of disaster.


Source link