Increased Construction Costs and Homeowners Insurance
- Feb 24, 2022
- 2 min read
Replacement Costs for Homeowner's Insurance in the Long Beach Island Real Estate Market
Long Beach Island Real Estate and Insurance Costs
If you visit Long Beach Island right now, it seems that a new home is being built on every block. Some of these homes are being constructed as investments to be sold, and many are end-users looking to upgrade their residence. This increased demand, coupled with material shortages, has increased the cost of building a new home on Long Beach Island. This increase may seem isolated to only those looking to build a new home, but in reality, it has the potential to impact all homeowners on Long Beach Island. Almost every house on LBI has a homeowner's insurance policy, and thanks to the increased cost of construction, the coverage you think you have may not be sufficient.
Increased Construction Costs and Homeowners Insurance
I should begin by saying that I am a real estate agent, not an insurance agent, so it is best to verify your coverage with your licensed insurance broker. That said, one aspect of most homeowner's insurance policies is the replacement cost of the home. This is usually a price per sq foot number determined based on market conditions when the policy is written. In other words, the policy has a coverage amount that is tied to the building cost of a new home. Some policies or insurance agents will adjust these rates according to market conditions, but not all policies will. Therefore, with the dramatic rise in construction costs, some homeowners may find themselves underinsured. This can lead to dramatic consequences in the event you need to use your insurance. As we come into the hurricane season on Long Beach Island, this can only become more important. The best way to check on this is to speak to your insurance agent and discuss your concerns with them. Your insurance agent will review your coverage and ensure it is appropriate to the current building climate in the LBI real estate market.
Replacement Costs for Homeowner's Insurance in the Long Beach Island Real Estate Market
The increased construction cost can impact homwoenrs' insurance and the LBI real estate market in general. Small changes like this can have a meaningful impact on your investment on Long Beach Island! Market conditions in the LBI real estate market are changing all the time, and as a homeowner or buyer, it is always important to follow the trends. If you have any questions about buying, selling or investing in the LBI real estate market, please do not hesitate to contact me.
By : Nathan Colmer | LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
