The global pandemic has resulted in a shortage in building supplies due to three main factors:
1. COVID-19 industry-related production shut-downs
2. The continuing strong Canadian housing market
3. An increase in demand as Canadians choose to perform home upgrades
How does this affect your house insurance?
This increased demand for building supplies, particularly lumber, is reflected in soaring costs and shortages. This may result in your home being underinsured in the event of an insurance claim. It’s important that all homeowners understand their policy limits as well as the benefits and risks of their coverage type, whether it is a Guaranteed Replacement Cost (coverage for whatever it takes to rebuild your insured buildings) or co-insurance (insuring to 100 per cent of the replacement or actual cash value).
Consider the amount it would cost to reconstruct your home in the event of a fire, does that match your coverage amount? Also, factor in clean up and debris removal costs.
Quite simply, your insurance coverage may not cover the cost to rebuild your home.
If you’ve performed improvements on your home, be sure to relate these updates to your insurance professional to ensure you have the coverage you need.
Having an adequate amount of coverage is critical to ensure you have sufficient funds to rebuild your home in the event of severe damage. If you are unsure about your policy limits or would like to update your policy, we can help you; please reach out:
info@easyinsure.ca or call: 1-800-679-2640