Something important that you might not have already known is that building costs and your insurance are actually linked. As the cost to build increases, there is a possibility that you can encounter gaps and shortfalls in your coverage. To make sure our loyal customers are covered and prepared, we’re here to tell you what you need to know about building costs and coverage.
Among building new structures, repairing old ones and rebuilding some, many people have encountered an issue with the costs that come from these tasks. Along with the obvious increase in price of goods, we also see a decrease in the availability of many necessary items. Many contractors are finding themselves in difficult situations from signing a contract in 2020 and now having to fulfill their end with the impending economic factors at play. In only 8 months the prices of lumber have easily tripled. Considering that increase, it is easy to calculate that the price of building a home has nearly doubled.
The first example in which these factors may affect your coverage is in the event of a total loss. If you paid $250,000 for your home when you purchased it and then your home was destroyed in a fire, your insurance would provide you with the $250K to build a new one. As we stated, prices have increased, and in order to build the same home that you lost it would cost more toward $350,000. In that event, you would be out of $100,000 and would be forced to either make up the difference or perhaps even resort to a smaller house.
Another thing to consider is the time that it will take to rebuild your home. Your house was totally destroyed and is now undergoing either repairs or rebuilding…you and your family have to stay somewhere. You’re now forking out money to a hotel or perhaps a friend or family member that is allowing you and your family to stay. Further, due to the shortages, the items to repair your home are even more difficult to find, leaving you out of your home for longer and spending more time and money on temporary housing. Both of these are factors you must consider and prepare yourself for.
You might now be asking, “what can I do to acclimate for these economic changes and prepare for the worst?” There’s no need to worry, the insurance experts at Singh Insurance and Financial Services are here to help. Together we can make sure that you have the right amount of coverage and will be prepared in the event of house damages. Contact us today at 354-432-1646 today!