2020 set a new annual record of 22 weather and climate events in the US, compared to the previous record of 15 events. We have seen a substantial increase in the frequency of catastrophes across the country, causing an influx of property rebuilds and thus the demand for the necessary materials. The cost of construction has seen an upsurge over the past few years, partially due to the pandemic. Within the last year alone, building material costs have risen by 40-80% and construction projects are taking longer than ever due to the lack of skilled laborers. Extended project timelines are contributing to the increased cost of projects and construction companies are struggling to complete builds in a timely and cost-efficient manner.
Accurate property valuation continues to be an issue in the insurance industry as insurance companies struggle to keep up with these changing costs of building materials. As replacement costs continue to rise, it may be beneficial to you, as the insured, to review your policy and set up an appointment with your agent to insure your homes and outbuildings are correctly valued and insured with the appropriate limits. An accurate property valuation can be beneficial should a loss occur. If a loss occurs, this valuation can directly impact whether buildings will be covered at replacement cost or at a depreciated value.