When you purchase homeowners insurance, getting enough coverage to cover the entire cost of replacing your home can be wise. If a devastating event destroys your home, the last thing you want to do is worry about how you will afford rebuilding costs.
If your policy covers your home on a replacement cost basis, the insurance company may pay claims based on the full price to rebuild your home if it is damaged by a covered event. Because home repair costs are increasing, homeowners are also seeing an increase in their insurance rates.
Why Are Home Repair Costs Increasing?
In recent years, home repair costs have been increasing due to a variety of factors, including:
- Trade labor shortages—The number of tradespeople is decreasing, and fewer people have been entering the industry, which means there is a high demand for labor and not enough people to do the work.
- Supply chain disruptions—There continue to be significant delays in getting materials for home repairs and building projects, driving up demand and increasing costs.
- Weather-related losses—The rise in frequent and expensive repairs due to weather-related incidents can put more pressure on available supplies and labor. This can contribute to price increases.
- Increased inflation rates—Inflation rates have risen, impacting the costs of supplies for builders and remodeling contractors.
- Rising material costs—The cost of building materials continues to increase due to supply chain issues and rising inflation rates.
What Factors Affect the Replacement Cost Value of Your Home?
Many physical features of a home can affect its replacement cost, including the following:
- Square footage
- House shape and style
- Features and finishes
- Foundation type
These are just a few factors that affect the replacement costs of your home. Finding a reliable insurance provider to estimate replacement costs accurately can help.
How to Estimate the Replacement Cost of Your Home
One way to accurately estimate the replacement cost of your home is by discussing it with an insurance provider, such as Lupton & Luce Insurance Agency. We have experience working in the current market and can make an accurate estimate and ensure you have the coverage you need to be protected and provide you with peace of mind.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.