When it comes to building, repairing, renovating, etc. the cost of building materials is always rising. This means that when it comes to REbuilding after an accident, it’s going to cost more to replace your stuff than it did when it was first built.

As the cost of cars rise, insurance costs must also rise in order to cover the cost of replacing a vehicle in case of an accident.

What, exactly, is replacement cost?

Replacement cost calculated by the cost of materials and labor at the time of rebuilding, repairing, or replacing.

What does ‘market value’ mean?

Market value is the amount your home or automobile would sell for on the market.

How does ‘market value’ relate to your insurance?

Insurance coverage is determined by the amount it would take to repair or rebuild, NOT how much it would sell for.

Why are policyholders seeing increased premiums?

Construction costs are steadily rising and in order to keep up with the rate to rebuild or repair, insurance must increase with inflation.

What factors affect the cost

Age of home

Materials used in original construction – insurance is set up to replace with equivalent type or quality of material

Square footage of home

Local labor and construction costs

So, if your insurance didn’t increase, you’d only be covered for some of the cost to rebuild your (or someone else’s) home, which is a situation we don't want you to find yourself in. Call us today at 720.335.6872 if you have any questions or want to review your policy!