Inflation & Insurance

Is Your Insurance Keeping Pace With Inflation?

jerel lorenzo Commercial, Personal

The annual inflation rate unexpectedly accelerated to 8.6% in May 2022, the highest since December 1981. Insurance is your safety net in case disaster strikes, and with today’s economy, a potential catastrophe will cost you more than it would have last year.

Inflation is increasing while our spending power is decreasing. We are all experiencing the financial stress from rising gas prices and groceries. With the increased costs, it’s understandable that updating your business and homeowners’ insurance policies are not at the top of your priority list. However, during this period of significant inflation, your current insurance coverage can become inadequate.

For example, during COVID, many people took advantage of the time at home to upgrade or renovate their house. Lumber and other construction materials have spiked in price due to less availability, making the costs to repair and build homes more expensive.

Costs for building supplies, auto parts, home appraisals, labor costs are all on the upswing. This means it costs a lot more money to fix or replace your home, business, and automobile.

We’re currently seeing inflation rates nearly double of what is typical, and even if you have inflation guard or insurance inflation protection, you may still be underinsured.

Another consideration is your business. If your revenues have changed due to inflation, or if you have more or less employees now, that can affect the amount of coverage your need. Now is a good time to meet with the professionals at Charles Leach. They can help you determine if you need an annual inflation adjustment, extended replacement cost, and building value increase that can better protect you in today’s current conditions. You can set up an appointment by contacting us at 814-275-3224.