Soaring reno and rebuild costs: how they impact your home insurance

Why are building material prices soaring?

The price of timber has gone up by 125%, structural lumber by 300%. Solid wood hasn’t been spared either, nor have other building and finishing materials. So, if you're thinking about installing a superior quality wooden door that meets all Régie du bâtiment du Québec standards, you should be prepared for sticker shock.

The same goes for electrical fixtures because the costs of machinery, energy products and electrician’s equipment are also rising. The construction industry is facing unprecedented shortages and delivery delays, partly caused by a lack of factory workers and absenteeism due to COVID-19. The increase in new builds is also driving up prices.

What does your home insurance cover?

In the event of loss or damage, your home insurance usually covers a complete rebuild, based on current market costs for new construction. These costs are based on the size of your property, the height of the walls, the price of the original materials, the cost of plans and permits, etc. The insurer’s appraisal report is as comprehensive as possible, and takes into account all of the building’s characteristics.

Have you contacted your insurance representative?

Since appraisers are currently being forced to revise home rebuild costs upwards, you should contact your insurance representative to find out whether the original values you calculated are still sufficient. Do they cover both direct and indirect costs? Even plumbing materials and the wages in many trades are going up these days.

Have you insured your renovations?

Whenever you make improvements to your property, like a garage, a shed or an in-ground pool, they affect your home insurance policy. Renovations and upgrades, like finishing the basement or upgrading your home to meet new safety or environmental standards, can affect your insurance coverage.

That’s why you need to notify your insurance representative to adjust your home’s rebuild-as-new value. In times of rising construction costs, this sensible precaution is more important than ever. It will help you avoid unpleasant surprises if your home is destroyed or damaged in these turbulent times for the construction industry and its supply chains.

A chat with your insurance rep will ensure that you’re well covered for any loss or damage to your home if you need to rebuild! 

This website provides general information only. Your insurance policy contract takes precedence at all times.