How Rising Lumber Costs Affect Your Business Insurance
The Rising Costs of Lumber
Softwood lumber prices rose by an astounding 118.9% in Canada between March 31, 2020, and March 31, 2021. This year over year increase is the largest reported by StatsCan.
How Does This Affect You?
As a business owner, it is vital that your property insurance policy accurately reflects the rebuilding value of the property being insured. With the cost of lumber rising, the cost to rebuild or replace your property rises as well.
Many policies include a coinsurance clause. This clause requires policyholders to insure their property/equipment/buildings…etc. to at least a specific percentage of the total replacement cost value. If the building value is below the co-insurance requirement, it could result in your property being underinsured.
It is also important to remember that debris removal expense may be included in the limit of insurance. Debris removal is the cost to safely dispose of the rubble left over after a windstorm or fire for example.
What Should You Do To Protect Your Property?
We encourage you to speak with professionals in the construction industry. A Real Estate Agent can discuss reconstruction values with you. Building appraisers are also a valuable source of information. Connect with your advisor to review the limits on your insurance policy and discuss what changes might need to be made.
Our advisors are here to answer your questions, address your concerns, and make sure that you are properly protecting what matters most to you.