Rising Reconstruction Costs May Keep Property Insurance Rates Climbing | Insurify [Video]

Rising reconstruction costs are making it even more expensive for insurers to pay claims for property damage, according to an August report from the insurance rating bureau Verisk. And businesses and homeowners could see higher premiums as insurers pass those costs to consumers.

The study found reconstruction costs in the United States, including materials and labor, increased by 5.2% from July 2023 to July 2024. That jump is a “significant increase” compared to the previous year’s cost growth of 4%, Verisk reported.

“Rising replacement costs will continue to impact consumers and business owners as increases in materials and labor are factored into future property insurance premiums,” Insurance Information Institute (Triple-I) Corporate Communications Director Mark Friedlander told Insurify.

Cost increases vary by location and category

Residential and commercial reconstruction costs increased by around 3.4% in most states, but some saw more significant jumps.

New Hampshire had the largest increases since last year, at 9.6% for residential and 12.4% …