Home building cost increases drive up homeowner’s insurance
WAUSAU, Wis. (WSAW) - Homeowners may soon see a larger cost than expected when they renew their insurance plan. Policies are expected to go up by more than usual this year. Insurance agents in central Wisconsin say that’s because the cost to build a home is increasing.
Local insurance agencies say it’s their responsibility to properly cover the cost of re-building your home. And building prices are more expensive this year than last due to a number of factors.
Jim Nick says a typical year-to-year insurance increase is 1% to 4%. This year, homeowners may see an increase of about 10 to 12%.
“We’ve been getting a lot of calls,” said Jim Nick, an American Family Insurance agency owner in Marathon County.
Nick says he explains to customers that because materials like lumber are a luxury right now.
“That is being shown with the inflation index on the homeowner’s policies as far as renewal,” he said.
He’s advising clients to renew instead of changing their plans.
“Just stick with it, because if something happens, it’s going to affect you,” Nick said.
And affect you by being a bigger loss if you have to pay to rebuild a home.
“We sell a replacement policy. Our obligation to you is to rebuild your home. If something happens to your home, and it’s our job to replace it, we need to increase your coverage,” he said.
He’s dealt with enough disasters to know that coverage is important.
“At the end of the day, if something did happen, god forbid, you’re going to need the additional coverage,” he said.
Nick believes this could be a temporary increase and believes it wise to ride it out.
Newschannel 7 also reached out to Buska & Buska insurance in Wausau. An agent there says they’re not convinced the increase is temporary or when home building will be back to pre-pandemic prices.
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