How the pandemic may have affected your homeowner's insurance
Now that the world is starting to return to normal, the effects of the Covid-19 pandemic are becoming apparent in ways we didn't expect over a year ago. For example, no one thought toilet paper and yeast would be so scarce that fist fights would take place to grab the last one on the shelves, but it happened. Another unexpected outcome is the need to review your homeowner's insurance. Stat. ASAP. Like yesterday.
Why? Here's the reason. As you are likely aware, after the initial shock of quarantine wore off and the markets figured out that the world wasn't ending, the housing market began an unprecedented boom. Increased demand for housing driven by a double whammy of suddenly home-bound people looking for new space and the largest generation in the history of the US coming of home buying age and entering the market (we're looking at you, Millennials), coupled with historic low interest rates equaled the biggest housing boom ever. Prices rose, inventory was incredibly scarce, bidding wars ensued, prices continued to rise, and so on.
Now for the answer. The earth of housing listed for sale meant many homeowners chose to stay put but do renovations or additions. Home builders increased starts. These twin market pressures have led to rapid increases in the price of building materials, particularly lumber. That means that it costs more to build homes. Which in turn means it will cost more to repair or replace your home in case of fire or other catastrophe. And that means it is very possible that your current homeowner's insurance policy is insufficient to completely restore or replace your home in the event of a major loss.
Long story short, it's time to review your policy if you have not done so in the past year. If you need a referral to a trust worthy insurance professional, I'm happy to help.