Over the past few years, the cost of lumber has jumped almost 200%. Much of this is due to the pandemic, but other factors include where the lumber comes from and how easy it is to get it where it needs to be. States like Florida and Louisiana that have been hit extremely hard due to storm damage, and California that has seen extensive wildfire damage, have increased the required materials to reconstruct homes and other buildings.
Lumber Costs Have Skyrocketed
The two biggest factors that have impacted the cost of lumber over the past year include the increased need for construction materials to repair storm and fire damage and the limited supply of wood as an impact of the pandemic. With both events occurring within a year, the resulting strain has increased the cost of lumber.
The Total Cost of Construction, Inflation, and Your Home Insurance
The cost of replacing a home is what the dwelling coverage of your homeowners’ insurance is based on. The cost of building a new home to replace one that has been lost is rarely comparable to the value of your old home. The cost of labor, materials and the actual construction will more than likely have increased quite a bit over time, making it almost impossible to build a new home costing the same amount as the one that was lost. Inflation dramatically impacts this equation and can be a real eye-opener.
How Reconstruction Costs Vary by the State?
Reconstruction costs will vary from state to state. States where lumber is abundant may have lower prices in terms of labor and materials. If you live in a state where transporting lumber and materials is extremely difficult due to geographic constraints, the cost of rebuilding your home may be much higher than you would expect. Your state may also be affected by increases in demand, such as the states mentioned earlier that are prone to strong storms and natural disasters.
Understanding what affects your homeowners’ insurance cost will help you make a wise decision to find a policy that will meet your needs. The insurance professionals of Scavone Insurance Center can assist you in understanding every aspect of your policy and how the economy may or may not affect it. We will guide you through the process of finding the perfect homeowners policy!