How Increased Building Material Prices Might Be Affecting You
Business Insurance | Personal Insurance
Written by: Michelle Peterson
Are you currently building a home or a building for your business? Or do you know someone that is in the process? Then, I am sure you have heard about the rising costs in building materials. The National Association of Home Builders reports that lumber costs have increased 340% since 2020.
Why is this happening? There are several factors that have contributed to the rise in building material prices. Interest rates for home buying are at a historical low, creating an increase in demand for home purchases and renovations. This increase in demand has skyrocketed the demand for building materials which has led to supply shortages. COVID-19 has also played a role in the increase of prices.
How does this effect you? If your home or building for your business is insured on a replacement cost basis, the current limit of insurance may be inaccurate. The Collins Dictionary defines replacement cost as “a method of valuing insured property in which the cost of replacing property is calculated without a reduction of depreciation.” If you were to suffer a total loss right now, would you be able to rebuild with the current limit of insurance you have on your policy?
We highly recommend that you review your current limits of insurance with our staff to ensure you are properly covered in the event of a loss. Please call one of our offices today to schedule your review.