It’s no secret that home construction costs impact insurance rates. Your home’s replacement cost estimate, the amount needed to rebuild your home from the bottom up, is based on construction and lumber costs. As lumber prices go up, so does your replacement cost estimate, and ultimately, your premium.
Lumber Prices Are Up 193%
Lumber prices are at an all-time high. Back in April 2021, the cost of lumber per thousand board feet hit $1,048 – a 193 percent jump year over year. That surge continued throughout May, and while lumber prices have begun to fall, they’re still up over 300% from April 2020 .
The chart above shows just how much lumber costs have skyrocketed in 2021 compared to the previous five years. For example, lumber prices in April 2016 hovered around $300 per thousand board feet. They steadily climbed through 2018, reaching nearly $500, dipped again in 2019, and have been climbing rapidly from 2020 through today.
Just last month alone we moved over a quarter million dollars’ worth of insurance premium an in order to alleviate the current insurance markets. Insurance markets due to weather related incidents that all of us are aware like Oregon hitting triple digits temperatures, Texas having winter anomalies etc. insurance rates will be on the rise for the next two years we’re going into a hard market that hasn’t been seen since the 80s and there’s a lot of protocols and a lot of adjustments, we can make to make sure that a transition is done smoothly.