Broker Check

Lumber Prices and Your Homeowner's Policy

June 07, 2021

As society begins to open up after the pandemic, the economy is sporting some unusual features.  Unemployment remains slightly high, but inflation (in some sectors) is rising sharply. 

Normally unemployment and inflation go hand-in-hand, but the extra stimulus for many (i.e., extra money in their pockets) and pent-up demand (i.e., nowhere to spend that cash over the past 15 months) has fueled rising prices in some segments of the economy. 

One of the segments that has seen astronomical inflation is lumber prices.  According to, the price of lumber over the past year has risen 377%[i], which is driving the cost of anything building-related higher.

If you’re not a builder or planning any renovations, you might think this doesn’t affect you.  But if you’re a homeowner it certainly could affect you if you had to replace your home due to a fire or some other unforeseen event.

If your homeowner’s policy covers “full replacement value,” then the policy should cover the replacement cost for the time the event happens regardless of prices.  These policies are usually pricier but, in my opinion, worth the extra premium.  There’s an old maxim about insurance, “Never risk a lot for a little.”  Having the proper coverage, even if it costs a little more, is worth it.

If you don’t have full replacement value coverage, you’ll need to make sure your policy would pay for what it would cost to replace your house with today’s prices.  Don’t assume you have enough coverage.  Do the calculation and research to be sure you have the proper coverage. 

Of course, I’m available to help.  Call me if you have questions about your coverage and I’ll be happy to assist you.[ii]




[ii] I don’t offer property & casualty insurance, but I can direct you to the proper professionals.  I receive no compensation for such referrals.