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COVID-19 Has Pushed Dwelling Insurance Prices | Florida Realtor – | Florida dealer

"Replacement costs" cover rebuilding a destroyed house, and this option is now more expensive for the same reason: new houses are higher utility costs.

NEW YORK – The aftermath of the COVID-19 pandemic has reached a number of industries, including housing construction, which is facing a shortage of supplies and a trained labor force. At the same time, the demand for new buildings or apartment conversions is increasing.

As a result, it costs more to insure a home, and in some cases prices have risen faster than inflation.

The Insurance Information Institute (III) found that insurance premiums in California rose an average of 20 to 30% over the past year. Florida and Louisiana, while the current inflation rate is around 6%. While many economists say the increased cost is temporary, the pandemic continues its wave of disruption with each new variant emerging, including Omicron, which has spread rapidly.

"Home insurance is not tied to the market value of a home, it is based on the cost of rebuilding," says Jeff Brewer of the American Property Casualty Insurance Association. This means that not only are premiums rising – already $ 1,400 a year on average – but some homeowners may not realize they are now underinsured.

III's Mark Friedlander said climate change and billion dollar disasters are another problem for homeowners.

"We're seeing more expensive catastrophic events in the United States this year, including 18 weather disasters with losses of more than $ 1 billion each," he said. Friedlander added that only three of the 52 local insurers were profitable in Florida. Homeowner insurance premiums are likely to rise even if policyholders keep their coverage, but homeowners need to reassess the cost of rebuilding a home and make sure they have adequate insurance in place.

Source: Forbes (08/12/21) Leefeldt, Ed; Danise, Amy

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