Home Insurance rates to increase.
I’ve been reading about and personally experienced some things that are going to have a dramatic affect on home insurance rates over the next few years and possibly permanently. We’ll start with my personal experience. In 2017 my wife and I were looking at moving and buying a different home. One of the things I’ve always wanted was a space I could put in a woodshop. I reached out to a couple contractors I know and just asked what it would cost to put up a 2 car garage sized structure in case we found a house that didn’t have the space. They were telling me somewhere in the $35-$40k range. Well we found a house, it didn’t have the space for my woodshop so I then got a couple of bids for the new shop and now in 2018, that garage is $50k!
Here are a few facts to substantiate that figure and the increase. In 2017 the price of lumber increased nationally by 14%. The prices of shingles have increased more than 50% over the last 7 years. The cost of labor is also increasing for all of the trades. This is the issue that I believe will have a bigger affect on all of us than materials prices. It seems that we have a serious shortage of tradespeople. More young people today are choosing to go to college and get a job in the “Tech sector” rather than get a job as a plumber, electrician or carpenter. This is driving up the cost of labor. Now the tradespeople have so much business they can pick and choose what projects the will take. Which ones do you think they are going to take first? The highest paying jobs of course!
One of my insurance carriers is telling me just in the first quarter of 2018 alone their rates have increased 4.7% due to this inflation. I hate to think what it’s going to be for the year.