Over the past 18 months, there has been an unprecedented increase in the cost of construction materials and labor as the economy recovers from a challenging 2020. With the easing of Covid-related restrictions and stimulus money entering the economy, demand has increased, driving costs up.
As in years past, we monitor inflation trends, the consequential impact on reconstruction cost, and, ultimately, the materials needed to build commercial structures and homes.
As of Q2, 2021 we saw some of the following annual price increases.
- Lumber +54.0%
- Plywood +42.6%
- Ready Mix +3.8%
- Roofer +6.0%
- Plumber +4.1%
- Electrician +4.6%
What does all this mean?
Unfortunately increased premiums. To account for these increasing construction costs, we feel insurance companies will be applying an inflation factor is applied to every property policy renewal to ensure policies continue to be adequately insured. This increase will be part of the policy’s premium and is needed to cover the rising cost of building materials and labor. This will apply to both commercial and business insurance policies.