(InvestigateTV) — Homeowners insurance premiums can jump for a lot of reasons. One factor is the cost to repair or rebuild after a loss, including the price of building materials.
That is something Cliff and Laura Pasquello say they experienced firsthand. Before moving to North Carolina, they owned a home in Pennsylvania.
“We had only owned in five years, for five years since 2019. And in that five and a half year span, we saw our premium jump from about $1,300 to almost $2,300,” Laura Pasquello said.
In their case, they say it was not a hurricane or flood that triggered the spike. Instead, they point to rising building material and lumber costs.
A Consumer Federation of America report found homeowners insurance premiums rose in 95 percent of U.S. ZIP codes from 2021 to 2024. For a typical homeowner, it found premiums rose $648 a year, a 24 percent jump, to an average of $3,303 in 2024. The report points to multiple pressures, including higher construction and material costs, climate change, and a tight global reinsurance market.
To break down the materials side, InvestigateTV spoke with Dallin Brooks, executive director of the National Hardwood Lumber Association. It is a nonprofit trade organization serving the hardwood and sawmill industry in North America.
“Coming out of COVID, we had a lot of people trying to bring back the labor force. And so, we had a lot of companies, give their employees across the board $3 an hour raises. And so that immediately boost the cost of all of the materials across the board,” Brooks said.
Brooks said labor shortages, including trade jobs like lumber graders and equipment operators, have also hit the industry.
When asked what would bring costs down for homeowners, Brooks pointed to what he called economy of scale.
“I think I can actually sum that up in three words: Economy of Scale. What we need is for our hardwood mills to improve their economy of scale, so that we can get more fiber through our mills, more wood manufactured, more customer service at a higher level. And in order to do that, we actually need demand to go up,” Brooks said.
The CFA report notes premiums can vary widely by company and policy, including differences in “replacement value” and deductibles. When getting quotes, experts recommend comparing coverage apples-to-apples.
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