How Inflation is Affecting Underinsured Homeowners

August 4, 2022
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It’s the bad news we’re all too familiar with – inflation is at a 40-year high, building costs continue to skyrocket, and construction delays can sometimes extend projects for months. This unsettling trend has left millions of homeowners underinsured in the event of damage or catastrophe.

Now the good news – SunPoint Public Adjusters, Inc. is here to help. We’ve gathered the information you need and steps to take that will ensure your property is fully protected.

The Risks of Being Underinsured

A new survey conducted by the American Property Casualty Insurance Association (APCIA) revealed that most insured property owners have not taken the necessary measures to keep pace with today’s market.

Two-thirds of homeowners have not added coverages to protect against rising replacement costs. That means, if disaster strikes and you need to rebuild, any differential in what’s covered under your insurance plan and the actual cost of construction will be left for you to pay the bill. With materials alone up by 44% (for the two years ended December 2021) that could mean an underinsured gap of tens of thousands of dollars.

Do You Have the Coverage You Need?

There are specific features that can be added to your policy to specifically address the impacts of inflation. The challenge is that more than 60% of homeowners aren’t sure whether these coverages are part of their current policy.

Annual Inflation Adjustment Coverage: automatically adjusts coverage at renewal time with the intention of keeping up with inflation

Extended Replacement Cost Coverage: allows for increases in coverage when building costs rise after a natural disaster

Building Code/Ordinance Coverage: bumps up coverage to meet requirements of changing building codes or energy ordinances

Steps to Avoid Becoming Underinsured

Now that you know the relationship between inflation and your insurance coverage, what can you do to safeguard your property and your wallet?

1. Calculate your estimated current replacement cost.
It’s important to know the financial outlay of a rebuild in order to evaluate if you have enough coverage. An easy way to calculate replacement cost is to take the average construction cost per square foot in your geographic area and multiply it by your home’s square footage.

2. Review and modify your insurance policy.
Each year take a look at your policy, evaluate the coverage levels and adjust accordingly.

3. Regularly update your home inventory.
If you don’t have an inventory, create one then make sure you are adding and removing items and their values at least once a year.

4. Work with an experienced public adjuster.
In the unfortunate circumstance that you sustain damage requiring a claim, reach out to a reputable public adjuster like SunPoint Public Adjusters, Inc. A public adjuster will become your partner in examining your policy coverage, navigating the adjustment process, and disputing/resolving claim payments. Public Adjusters are key to receiving the best recovery outcome.

SunPoint Public Adjusters, Inc. Advocates Only for the Insured’s Benefit

SunPoint Public Adjusters, Inc. (“SunPoint”) is the “Gold Standard” of the Public Adjusting industry. We comprehensively review and evaluate your insurance settlement, immediately deploy a team of specialists to assess and quantify your damages, and customize a strategy around your personal recovery to promptly and properly maximize the resolution of your claim.

Our in-house experts and external veteran professionals are experienced in quantifying and negotiating building, personal property, inventory, or other additional coverages. We work solely on your behalf to favorably resolve your claim. Our team ensures your insurance company does not delay, diminish, or deny benefits that are rightfully owed to you. Industry authorities agree that having a public adjuster like

SunPoint on your side early in the process expedites and maximizes your recovery.
Policyholders have been benefiting from our knowledge and advocacy for decades. We have handled, managed, and successfully navigated claims ranging from homeowner losses; corporate losses in the hundreds of millions of dollars; disaster losses involving government entities and entire municipalities; agricultural and recall losses, and virtually any type of disaster claim that could be imagined.

Our team of Public Adjusters, building cost consultants, inventory specialists, forensic accountants, and equipment consultants are unmatched in our industry. It is easy to be big. But it takes dedication every day to be the best – we have that dedication. Our goal is aligned with yours. To obtain a free insurance settlement assessment of your specific circumstances and recovery please contact us and strategize your optimal means of recovery.