Building Material Prices are Through the Roof! Are You Protected?
The COVID-19 pandemic has resulted in significant shifts in supply and demand for a variety of common items over the past year – building materials included! According to a CNBC article from February 2021, lumber prices currently are 112% higher than they were a year ago – impacting budgets for DIY projects and larger-scale renovations alike.
With such dramatic cost increases, you are probably left wondering - is your homeowners insurance policy providing you with the level of coverage you need? Here are two options to help keep you covered.
- Inflation Guard Endorsement – This endorsement increases the coverage on your home by a certain percentage each year to keep up with inflation. Typically, your insurance carrier would set the amount of coverage on your policy to increase yearly by 3% to 4%. This year, most carriers are increasing that to over 7% to align with the surge in building costs.
- Replacement Cost – Does your homeowners insurance have replacement cost protection? You will want to make sure it does. In the event of a claim, this endorsement will give the current day’s value of the building and usually includes an increased amount of coverage on your building as well. This increase could be 25% to 50% above the coverage listed on your policy, or in some instances, a guarantee to replace your house the same way regardless of the cost at the time of loss. This extra protection helps account for extraordinary times where building costs are through the roof.
While it is always great to save money, one thing you shouldn’t cut corners on is your homeowners insurance policy. Some companies may offer you a policy at a lower cost, but it’s important to examine if there is a reduction of coverage as a result of those savings. With homeowners insurance, you usually get what you pay for.
SIS Insurance is here to help.
SIS Insurance will fully review your unique situation and provide you with tailored options that give you the coverage you need at prices that fit your budget. Contact us today to see what we can do for you!