Homeowners Underinsured Due to Rising Inflation: APCIA
A survey by American Property Casualty Insurance Association (APCIA) found that most homeowners have not taken the necessary steps to insure their insurance coverage keeps pace with rising inflation and increased building costs. This survey that included 1000 homeowners with home insurance highlights the risks of being underinsured if catastrophe strikes!
APCIA’s survey also revealed that 64% of homeowners are unsure or believe that their coverage limits are based on the real estate market value rather than rebuild costs. Another survey by the Harris Poll found that only 30% of homeowners with insurance have purchased more insurance or increased their coverage to account for rising building costs. Less than 40% of the insured homeowners who completed renovations or remodels during the pandemic had updated their insurance to include those changes.
U.S insurers paid out a record-breaking $176 billion for natural catastrophe claims in 2020 and 2021, making it the highest total during those two years periods of time as well!
Inflation, recent supply chain issues, and increased demand for skilled labor and construction materials following unprecedented natural disasters in the last two years have recently contributed to a significant increase in the costs of rebuilding homes and businesses. The cost of construction materials also has increased by 44% from 2019 to December 2021. This has resulted in longer rebuilding time and staggering high prices.
