Overall, insurers can expect replacement cost estimates to increase in the third quarter of 2013. According to data from Xactware’s Industry Trend Reports, reconstruction costs in all 50 states are up compared with costs at this time last year. In almost 20 states, reconstruction costs are more than 4 percent higher than they were last year. At the national level, reconstruction costs are more than 3 percent higher than they were in July 2012.
Demand surge from Hurricane Sandy in October 2012 is still a prominent factor driving increased reconstruction costs in the Northeast. To see Sandy’s continuing influence, check out the latest release of 360Value® Overview of Property Reconstruction Cost Changes. The report also provides details on how materials and labor costs have changed during the past 12 months.
Xactware uses its reconstruction cost data as the basis for estimating replacement costs, which insurers typically use to determine the coverage limit for a primary building structure in an insurance policy. The data in the report is an indication of the general trend and should not be the basis of underwriting decisions for an individual property.
Learn more about 360Value — the replacement cost estimation solution from Verisk Underwriting.