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Rising Prices, Rising Repair Costs: Why It May Be Time to Re-evaluate Your Home Insurance Coverage

From natural disasters to routine wear and tear, unexpected home repairs can put a significant dent in your wallet. Home insurance is meant to provide comfort and financial protection against these unexpected expenses. However, with the rising costs of materials and labor, your current policy may no longer be providing adequate coverage.

Between 2020 and 2022, building material prices increased 33%. Home building services, such as transportation, warehousing, and trade services, rose by 39%. As of March 2023, material costs were down 3.3% from the 2022 numbers but still overall higher than pre-pandemic prices.

Because of the overall increase in building material costs, repairing or replacing your home after a disaster is generally more expensive than it was a few years ago. You should review your coverage levels to ensure your benefits are keeping up with inflation.

How Could Price Increases Impact Your Next Home Repair? 

The cost of remodeling or rebuilding your home after a fire or natural disaster is based in part on the cost of the materials used in home construction. As the price of these raw materials rises, so does your overall home repair costs. Here is how some common material prices have trended over the past three years.

Softwood Lumber 

Evergreen trees like pine, fir, cedar, and spruce produce softwoods. Softwood lumber is more flexible and pliable than hardwood. There are several uses for softwood. It’s good to be aware of the costs of the material if you need to make repairs on any of the following:

  • Framing
  • Decking
  • Fencing 
  • Siding 

Softwood is typically more affordable than hardwood because it grows faster and makes up much of the world’s timber. From 2021 to 2022, however, softwood lumber prices nearly doubled, rising 90.4%. By January 2023, prices had declined 23%.

Gypsum Products 

Gypsum is a common mineral that is widely mined and used in various materials. The price of gypsum products rose 20.8% from 2021 to 2022, then leveled off in April of that year. By early 2023, gypsum remained 11.1% higher than a year earlier.

Uses for gypsum products:

  • A component of plaster and patching compound
  • Wallboards that cover ceilings and walls
  • Portland cement
  • Gypsum blocks, similar to concrete blocks for fire-resistant, non-load-bearing walls

Steel Products 

Most types of construction use steel beams. They form the main support framework for buildings and reinforce concrete. The price of steel mill products doubled during the pandemic, but costs decreased in 2022, dropping 30.1% by January 2023.

Uses of steel in residential construction:

  • Rebar, or reinforcing bars in concrete foundations
  • Floor joists, floor bearers, and columns
  • Wall framing
  • Trusses and battens


The price of concrete continues to rise, driven in part by shortages linked to regional supply chain issues. Deliveries from Turkey, a major importer, have been impeded by the war in Ukraine. The price of concrete has risen every single year.

Ways to use concrete indoors and outdoors:

  • Home foundations
  • Driveways, sidewalks, and patios
  • Garage floors and interior floors
  • Outdoor stairs

Freight Transportation 

The global supply chain crisis, caused in part by the pandemic, led to delays and increased costs for all modes of freight delivery. Contractors pass these overhead costs on to consumers. While costs for freight transportation have gone down in 2023, prices have yet to level off to pre-pandemic numbers.

A number of construction materials ship from overseas, including: 

  • Windows and patio doors, 
  • Bathroom equipment like sinks, toilets, and vanities
  • Flooring, including hardwood flooring, vinyl flooring, and ceramic and marble tile
  • Wall panels
  • Composite decking

Many of these construction materials are commonly used in building, repairing, and updating homes. If you’re looking to undergo any projects that involve these materials, you should know that freight prices will affect your overall cost.

How This Affects Your Home Insurance 

A standard homeowners policy covers the cost of repairing or replacing your home if it’s damaged by a covered disaster. Because of inflation, contractors have increased their costs to cover higher overheads. If you have not reviewed your coverage limits lately, you might not have enough replacement cost coverage. 

Consider Increasing Your Coverage 

Find out the current replacement cost of your home to determine if you should increase your coverage. There are a few ways you can estimate:

  • Insurance appraisal: Your insurance company hires a third party for a professional estimate of the replacement cost.
  • Online replacement cost calculators: Some insurance companies have replacement cost calculators on their websites. Use this to compare to the insurance appraisal.
  • Hire an appraiser: Hiring a professional appraiser is the most expensive option, but it yields the most accurate results. Professional appraisers thoroughly evaluate your home and hold state licenses that set standards for appraisals.
  • Estimate it yourself: Find out the cost per square foot to build a home in your area and multiply it by the square footage of your home. This gives you a ballpark figure, but you should probably compare it to another form of appraisal.

How to Increase Home Insurance Coverage 

The first step in increasing your home insurance coverage is to review your policy. You should meet with your insurance agent annually to ensure your policy limits are keeping up with inflation and that your coverage reflects any updates or remodels to your home.

You should then cover any gaps identified by your insurance agent. You can do this by updating your home insurance policy or by purchasing an inflation guard endorsement. This is a rider added to your policy for an additional fee that increases your coverage limit on your house to keep up with current local construction costs. 

Hope Ahead: Is Inflation Cooling Down? 

Inflation is cooling down in 2023 — welcome news after reaching the highest levels in four decades in 2022. Economists say overall prices aren’t declining, but the rate of increase is slowing. With that said, it could be a long time before we return to normal. So, make sure you’re protected if a disaster strikes. Research the replacement value of your home, and if necessary, increase your homeowners coverage.