Here’s how the recent increase in the cost of construction impacts your insurance claim. Co-Insurance can play a role. You must be insured at least 80% of the true replacement of the home, but are you?

Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

The rising costs of construction materials is a serious threat to policyholders in 2021. This rise is well documented at this point, but it is one thing to notice the trend and another to consider its implications.

According to an Associated Builders and Contractors analysis of Bureau of Labor Statistics data, lumber prices have risen by 73% since April of last year. This change has led the average price of a single-family home to increase by approximately $36,000. Just as recently as May 5, 2021, reporting indicates that lumber prices hit $1,600 per thousand board feet for the first time in history.

These drastic increases are not exclusive to lumber. Iron and steel products have seen a 15% increase in just a year. Steel mill products have increased in price by nearly 7% and fabricated structural metals are sitting at 3%. The pandemic is surely a driving force behind these changes, and the supply and demand chain is being stretched thin by contractors hoarding necessary materials in order to maintain their building schedules.

For policyholders, these rising construction costs have a significant impact on claims handling. Coverage limits must rise in order to ensure full recovery on a house needing significant repairs or a full rebuild after a loss. Without adjusting their limits to meet the construction inflation, policyholders risk being severely underinsured. Tools and other equipment have also seen rises in cost, meaning policyholders should revise their personal property contents list to ensure they have accurate pricing information in the event of damage to these items.

Another consideration is the type of loss settlement provision you have in your policy: actual cash value replacement (depreciated) or replacement cost. What may have worked for homeowners in the past may need to be adjusted in order to offset the risk associated with the trends in the construction industry.

Strategic Claim Consultants will ensure that your claim will be properly, expertly managed so that you collect the full settlement possible to protect, restore and rebuild your business and property. Please contact one of our licensed claim consultants with any questions you may have about your insurance claim at (844) 701-9995.

Strategic Claim Consultants is a leading insurance claim consulting and public insurance adjusting firm. With over 200-plus years of collective experience and over $1 billion in claims settled over the past 18 months, SCC delivers the claim advocacy and partnership a commercial property and business owner needs to navigate the insurance claim process.

Brandon Lewis, CEO and founder of Strategic Claim Consultants, is recognized as an expert in insurance claim consulting. His 30+ years of experience give him a comprehensive understanding of a commercial property/business owner’s needs and concerns. Lewis attended both Pace University Lubin School of Business and Hofstra University. He can be reached at brandon@strongclaims.com.

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