How Does Inflation and Supply-Chain Issues Impact My Insurance?
With Inflation on the rise, many clients are asking how this might impact their coverage. As many of us have encountered the higher cost of lumber, gas, and building materials, we can expect the replacement cost value of our property to increase. Below are a few of the policies that will be impacted by inflation:
· Homeowners – Construction costs have hit all-time highs recently. Replacing a damaged home will be more costly than before. Each homeowner should contact their insurance agent and re-evaluate the replacement cost for their home to make sure they have the proper coverage.
· Automobile – With supply-chain issues and inflation on auto parts, costs of repairing vehicles will also be a major challenge for insureds. Make sure the property damage limit on your auto policy is high enough to cover the value of most vehicles.
· Commercial Property - Construction cost, especially lumber, has increased dramatically. Be prepared to increase the replacement cost coverage on your Commercial Property. Verify with your agent that you have enough coverage to cover a total loss.
· Commercial Auto – Chip shortages, parts shortages, and inflation have caused the price of fixing damaged vehicles to increase. You can expect to increase the limits on your auto property damage coverage this year.
Within the next few years, you can expect the cost of your insurance to increase due to supply-chain issues and inflation. Make sure you talk with your agent on ways you can save on your policies and start budgeting for these upcoming price increases.