Insurance coverage on home value increases

Published: May. 25, 2022 at 11:15 PM EDT
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ALBANY, Ga. (WALB) - Recently, home values have increased across the nation.

On Wednesday, WALB’s Jim Wallace was joined by Steve Perrine, a State Farm Insurance Agent in Albany.

“Steve, home values have increased quite a bit recently. Should people think about their insurance coverage?” asked Wallace.

“Absolutely, Jim. Since COVID hit, and during this pandemic period, we have seen home construction prices increase by about 30 percent. The basic homeowner’s policy is intended to rebuild your home in the case of a total loss. And as you might imagine, if home construction prices are up 30 percent, the typical homeowner needs 30 percent more coverage to ensure that if the worst happens, we can put things back together,” Perrine replied.

“So what should people do? Hurricane season is coming up, and this is the time people probably should think about this type of thing.”

“Yes, for sure. In the case of our State Farm Homeowners Policy, and other companies doing something similar, we have an inflation guard, built into our policies. So consumers are likely seeing on their homeowner renewals, an increase in the dwelling coverage. And again we are doing that to protect them. But as you might imagine there are premium increases that correspond. They are not 30 percent, but it would not be uncommon to see a 5 to 10 percent increase in these last couple of years. And so people are starting to see that and feel that. We can look at deductibles. We can look at other discount programs. But yes, by all means, that is where the benefit of an agent comes in. The consumers and the viewers should certainly think about a homeowners review at this point,” Perrine said.

“Because I know also the price of materials has gone up quite a bit, in case of repairs,” said Wallace.

“Absolutely that 30 percent is comprised of labor, pressures, and cost of goods. And of course, there are supply chain issues. The one that people are most mindful of, lumber. News a couple of years ago, lumber prices went crazy. But everything else is up, so that combination of labor and materials is contributing to that approximately 30 percent increase in what it costs now to rebuild a house versus two years ago.”

“So a phone call or email to your agent might be a smart move right now,” said Wallace.

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