What To Know About Inflation And Your Property Damage Claim
The costs involved with home construction and renovation have skyrocketed due to inflation and supply chain issues since 2020. In fact, construction material costs in the United States rose in 2021 by the fastest pace since the Bureau of Labor Statistics started posting this data in 1948. The surge shows no signs of slowing down, either – the price of construction materials were up 18% in April 2022 from where they were a year before.
Meanwhile, inflation rates are at their highest levels since 1982, with consumer prices across the economy rising 7.5% in early 2022. Of particular concern for homeowners, prices continue to increase for lumber, appliances, and other materials necessary for home renovations and repairs.
The combination of high costs for materials and ongoing schedule backlogs among contractors have created a nightmare for many homeowners. Whether they are trying to build, renovate, or repair new damage, property owners currently face overwhelming challenges and shocking costs.
In the event of a natural disaster or other damaging event, homeowners could learn the hard way that their insurance policy’s coverage doesn’t cover the full cost of what it takes to rebuild the home. This can leave the insured spending out of pocket for costs that continue to rise and rise.
The Importance of Knowing Your Home’s Replacement Cost
Insurance companies use their own replacement cost calculators to estimate how much coverage is required to rebuild a home. Certain types of information such as square footage, year the home was constructed, along with original and existing construction materials usually go into the calculation of estimated replacement cost.
It is worth knowing exactly what your current home insurance policy says is more important than ever now. With inflation across the board driving up building costs to unprecedented levels, having inadequate coverage might result in a huge financial loss if your house is damaged or destroyed.
For example if your house is insured for $400,000 but the cost to rebuild your home to its previous condition ends up sailing over that amount, you could be left scrambling to cover the costs out of pocket after a total loss.
Most insurance companies now offer “replacement cost guarantees”, or something similar in the event of these scenarios. This provides coverage even if the total cost to rebuild exceeds what was generally covered under your policy.
Overall, homeowners and insurance companies face new challenges in today’s costly market for building supplies and contractor services. Whether you have questions about your existing policy’s issues, or are already getting the runaround from your insurer on a property damage claim, it can help to discuss options with an experienced Daytona property damage attorney for guidance.
Our Daytona, Florida Property Damage Attorneys Can Help if Inflated Building Repair Costs Have Caused an Issue With Your Insurance Company
The Daytona property damage insurance attorneys at Bundz a & Rodriguez, P.A., stand ready to help if your insurance company is giving you the runaround due to exorbitant rebuilding costs. While repairs are increasingly expensive to make in today’s market, that doesn’t excuse your insurance provider from paying out fairly under your policy. To learn more about how our attorneys can help, call our Daytona law offices today at 386-252-5170, or schedule a consultation with our Daytona Beach property damage attorneys online.
Source:
bloomberg.com/news/articles/2022-05-13/how-much-do-home-renovations-cost-inflation-shortages-and-delays-pile-up
