Rising Lumber Costs Affecting your Business Insurance?
As a business owner, it is vital that your property insurance policy accurately reflects the rebuilding value of the insured property. With lumber costs rising, the cost to rebuild or replace your property rises as well. In Canada, softwood lumber prices rose by 118.9% between March 31, 2020, and March 31, 2021. This year-over-year increase is the largest, according to StatsCan.
How Do Rising Lumber Costs Affect You?
Many policies include a co-insurance clause. This clause requires policyholders to insure their property/equipment/buildings to a minimum percentage of the total replacement cost value. If the building value is below the co-insurance requirement, it could mean underinsuring your property.
It is also important to remember that your policy may include debris removal expenses in the insurance limit. Debris removal is the cost of safely disposing of the rubble left over after a loss. Don’t be left paying for this cost out of pocket. Ask your advisor when was the last time there was a discussion on the limit of insurance on your property. Our advisors strongly urge a review of the limit at least every five years, but it’s best to review it sooner rather than later when a sharp increase in prices happens.
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 you might need to make.
Our advisors are here to answer your questions, address your concerns, and ensure that you are correctly protecting what matters most to you.