Lumber prices are up a staggering 188% – What does this mean for your home replacement cost protection?
March 26, 2021
The lumber shortage caused by the COVID-19 pandemic isn’t letting up, in fact it’s quite the opposite and it’s getting worse. In early March, the lumber shortage increased the cost of framing lumber to an overwhelming +188%, along with asphalt roofing +77% and sheet rock at +32%.
So what does this mean for you? Being a home owner, now is the time to review your home insurance coverage.
While you may have a ‘replacement cost’ several national companies have 25% rebuilding cost in place. With the current spike in costs, a 25% cap will limit your ability to rebuild what you currently have, which could lead you with having not enough coverage by a limitation your insurance policy has in place. A 188% market price increase versus a 25% cap does not favor the home owner.
For example, if you have a $100,000 home and there is a total loss, the most your insurance will provide is $125,000. With the cost of lumber up 188%, along with other supply shortages and cost increases as well, a 25% cap will leave you with a shortfall. Individuals will either have to under-rebuild or take out additional mortgage money to rebuild what they previously had.
There are a lot of variables in play and each homeowners’ insurance policy is as unique as your individual needs. As your Trusted Advisors that is where our experience comes in. Should you have any questions on your personal insurance program please contact your Agent or Service Team. They are happy to talk about your current policy or answer any questions you may have. Contact Us