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As we work to recover from the challenging year of 2020, and with a global pandemic still happening, we’re seeing the after-effects of a strained labor pool and supply chains trickle down into other areas of our lives still. 

One industry that’s seen an incredible increase in costs in the construction industry. Both materials and labor costs for building and construction have gone up exponentially plus extra stimulus money entering the economy has motivated more people to finally complete projects at their homes and is driving up demand for these services. 

Prices are already up on plumbers, electricians, and roofers and we’re still not seeing costs come down on things like lumber, plywood, or ready mix concrete. 

Since all of these things are needed in the home improvement space – whether you’re getting a new door installed or updating your windows – have all also increased the price of new homes by several thousand. 

So what does all of this have to do with insurance premiums?

According to insurance company Safeco, “A perfect storm of market forces has driven up the cost of building homes – and with it the  cost of insuring them for repair and replacement.”

In other words, to keep up with these rising costs and protect your home should it require repair and replacement, the costs to cover all the same work and replacement materials are needed. So, you’ll need a higher premium to adequately cover those costs. 

Keep in mind that for some homeowner policies, the result of this current economic inflation is only one factor that makes up our premium costs. Location and several other things are also combined together for costs. You may see the result of this current market situation factored into your renewal terms when that comes up for you – so be sure to pay attention and stay informed.

If you have any questions and want to discuss your current coverage options, call Petruzelo Insurance today!