COVID-19 has changed home values significantly. In some cities, home prices have increased 25%-40%. Home building prices like lumber have increased 25% to 50%. What has happened to replacement cost on homes? Have you reviewed your homeowners' policy to determine if your Coverage A “Dwelling” is keeping up with these increases?
Inflation guards only go so far. If replacement cost increases 25%, do you have a co-insurance problem?
Think about where all that lumber is going. It is going into making homes more valuable. The replacement cost is increasing because the cabinets are nicer, the deck is larger, the basement is being finished, new home offices added, and so on and so forth.
Combine the inflation in the cost of building materials, labor, and the expansion of home/improved quality of accessories, and a high probability exists that your homeowners' policy is materially underinsured.
We are in business to protect our clients. Contact us today to discuss and to update your coverage.
Photo Credit: Wix