By T. Scott Boatright
Homeowners in Lincoln Parish should be prepared for increased house insurance payments thanks to prices of lumber and other goods that have soared astronomically in recent weeks.
Standard insurance policies will typically repair or replace a home up to the amount it’s insured for. Some might have a clause that increases that replacement amount to 125% or 150% of a home’s coverage.
According to an infographic from the Visual Capitalist website, over the past year the price of lumber has increased by 377%, hitting a record high of $1,635 per 1,000 board feet, when lumber has historically ranged from $200 to 400 per board foot.
The price increase of lumber alone adds nearly $36,000 to the cost of a newly built home according to The National Association of Home Builders.
Those same kinds of numbers apply to homes needing repair after being damaged.
“It’s all based on the cost to rebuild a home,” a Ruston insurance company representative said Thursday. “Inflation has pushed up lumber costs tremendously and that’s increased insurance costs, because it now costs significantly more to rebuild a home should something happen than it did not that long ago.”
And it’s not only lumber that has seen costs skyrocket. Prices of gypsum, which is drywall is made of, are up nearly 7% from a year ago.
Steel mill product prices are at a record high, up nearly 18% in March from the previous year. And steel mills provide material used for beams, sheet metal products and wiring when building or repairing homes.