How inflation is affecting homeowners insurance premium increases
As part of our promise to protect your most valuable assets, you may see your homeowners insurance premium increase. We know no one wants to see their insurance rates going up, but these changes ensure we can deliver on our commitment to be there for you when you need us most.
How inflation is affecting homeowners insurance premium increases
As part of our promise to protect your most valuable assets, you may see your homeowners insurance premium increase. We know no one wants to see their insurance rates going up, but these changes ensure we can deliver on our commitment to be there for you when you need us most.
BY THE NUMBERS
20
%
20
is the nationwide inflation for building and labor materials.
31
%
31
of contractors say wood/lumber is the biggest material concern.
95
%
95
of contractors are facing at least one material shortage.
Economic disruption drives inflation up
The past year has seen major disruption in the economy and the home construction industry is experiencing even greater challenges. These disruptions have affected everything from the production of goods to labor to resourcing, and each of these supply disruptions have ripple effects across the economy. To put it simply, inflation occurs when demand exceeds supply, prices rise — that’s where we find ourselves today.
Source: Core Logic
Construction labor and material costs see major uptick
Our Promise
We want to ensure you have enough coverage to account for the increased costs of repairs resulting from inflation. Without these necessary adjustments, if something happened to your home, your home would not be fully protected.
bridging the inflation-coverage gap
PRE-RENEWAL
COVERAGE
RENEWAL
COVERAGE
Inflation rate in SageSure states
17%
is the average inflation rate for building labor and materials across SageSure’s 14 states.
Featured Insights
April 27, 2022
Insurance rates are going up—here’s why
Paying a higher price for something without knowing why can be frustrating. If you’ve noticed an increase in your homeowners insurance premium, a deeper look at why your homeowners insurance is going up might help you understand why — and feel better about paying the bill. Here’s a simple explanation.
March 8, 2022
Insurance and inflation: Looking at the dollars and cents
While most parts of the economy are experiencing inflation of around 7% to 8%, building labor and material costs are up nearly 20%, which is the highest in 40 years.
Inflation may feel more like a topic for economists than one for around the dinner table with friends. Maybe you hear analy…
February 22, 2022
Insurance and inflation: Your questions answered
Understanding how your homeowners insurance policy operates can be challenging enough without the added complexity of inflation. Even if you felt you had a good grasp of your policy when you purchased it, if you don’t stay connected to the details, it can feel like having to go to school all over again when you get your annual renewal packet in the mail – and that’s in a typical year. Lately, things are anything but typical. This year, inflation is having a major impact on the insurance industry, and it’s directly affecting most homeowners insurance premiums.
Here are answers to some of the common questions about inflation and insurance. If you need additional …
Frequently Asked Questions
What is inflation?
According to the U.S. Federal Reserve Bank of Cleveland, “there is inflation when the prices of many of the things we buy rise at the same time and then continue to rise. Explained another way, inflation is ongoing increases in the general price level for goods and services in an economy over time.”
How does inflation impact Homeowners insurance?
When the U.S. economy experiences significant inflation, the cost of construction, materials (such as lumber or metal), and labor increase. Materials and labor impact how much it costs to re-build your home in the event of a total loss. While SageSure hopes that no one ever experiences a total loss, it’s important to make sure that your policy has enough coverage for the increased costs of re-building your home in the event of a loss.
What has changed recently?
You may have noticed an increase in the cost of groceries, going out to eat, travel, etc. over the last year. Building materials and construction labor costs have experienced even higher increases, and since these costs have increased approximately 20% across the country over the last year, the coverage on your policy is being increased to cover the increased costs of re-building your home in case you experience a total loss.
Why is the replacement cost potentially different from my homes market value?
The replacement cost of a home considers the materials and labor cost of re-building your home in the event of a loss. Your market value is the price that you could sell your home to a potential buyer and includes the value of the land, the real estate market in your area, and other relevant factors.
Now I have more questions about the replacement cost of my home and my coverage, what should I do?
The insurance agency you originally purchased your policy from is a valuable resource to help you understand your policy and what coverages you have in place to make sure you are protected. Your enrollment package and policy documents from SageSure have the contact information for your insurance agency/representative. If you need help locating the contact information, you can always reach SageSure at (800) 481-0661.
What else I can do to make sure my home always has the right coverage?
It is always a good idea to keep your agency (where you purchased your policy) up to date on any changes or improvements you made to your home at least once a year, so that you always have the right coverage limit. Your agency can review any changes with you and adjust coverage limits if necessary.
Have additional questions? We’re here to help.
If you have questions about your policy or any other insurance related inquiries, contact your insurance agency/representative, or call our customer care line at (800) 481-0661. We want to help you understand your policy and feel confident that your home is protected.