The Globe and Mail reports in its Wednesday edition that home-insurance policy renewals are going up because of the spending wave on home renovations. The Globe's Rob Carrick writes that this year and last year's reno spending is a big reason why the cost of building materials such as lumber has spiked higher. Higher material costs put upward pressure on the cost of home insurance.
Mr. Carrick adds that provided you increase the value of your house, you need to let your insurance company or broker know about your project. Higher premiums could result, but do it anyway.
All that talk we hear lately about whether inflation is becoming a problem? In home insurance, climate change has been a factor in driving premium increases well beyond the reported inflation rate. Now, we have lumber-price increases bouncing off last year's inflated levels to new heights in 2021, and other material costs rising as well. These costs are of interest to your insurer because they factor into the cost of rebuilding homes and repairing damage.
BMO Economics recently said outlays in the first three months of the year suggest a record annual reno spending of $76-billion in 2021, up from the usual $60-billion or so in prepandemic years.
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