Rising Lumber Costs & How it Affects Your Home
As a homeowner or property owner, it is vital that your insurance policy accurately reflects the rebuilding value of your property. With lumber costs rising, the price to rebuild or replace your property rises as well.
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?
It is essential to know that rebuilding costs are not the only expense that will fall under the property value listed on your policy. Your insured value may include the cost of debris removal expenses under this insurance limit. Debris removal costs to safely dispose of the rubble left over after a claim.
Many policies also include a co-insurance clause. This clause requires policyholders to insure their home to at least a specific percentage of the total replacement cost value. If your property coverage is not to the correct amount, then your payout will be penalized in the event of a claim. Every policy is different, every insurance company is different, and while some policies may have an 80% co-insurance clause, others may have 90% or even 100%!
Often people won’t notice the insured value on their policy is inadequate until a claim has occurred, and then it’s too late.
What Should You Do To Protect Your Property?
Review your limits! Take a look at the building values listed on your policy and connect with your advisor to discuss any changes that you might need. Make your advisor is aware of any upgrades or renovations that you’ve done to your home. They will review all the rebuild evaluation details when determining the value to insure the property. Often increasing the insured value of your home will come with an increased premium. Still, a few extra dollars on your annual policy could be the difference between your claim being covered adequately or not.
Remember, you don’t have to wait for your policy renewal to review your insurance details. Our advisors are here to answer your questions, address your concerns, and ensure that you are correctly protecting what matters most to you.