Reconstruction costs can change over time, and at different rates by geography, down to a very localized level. These cost changes can have a direct impact on the cost to rebuild a property. It’s important for insurers to track these changes and update replacement costs when necessary to ensure their policyholders are adequately covered.
To better understand these changes over a long period of time, Verisk’s data stewards leveraged Xactware’s reconstruction cost data to gain greater insight into trends that influenced reconstruction cost activity during the 2012-2016 U.S. housing recovery. Their findings were published by Visualize in an in-depth, series of articles.
Read the entire Reconstruction Cost series written by Verisk’s Scott Amussen
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Northeast leads nation in reconstruction cost growth
At the national level, reconstruction costs increased 2.9 percent in the last 5 years. The Northeast led the nation, followed by the West in second place. Learn what market trends were at play. -
Why did Northeast lead U.S. in reconstruction cost hikes?
The Northeast showed the greatest growth with 3.4 percent average annual growth. See which development projects fueled the cost growth. -
After leading nation, replacement costs slow in the West
The West ranked second in reconstruction costs, growing at 3 percent. Discover why it was partly “feast” and partly “famine” driving costs. -
Midwest replacement cost increases fueled by oil boom
The Midwest had the third highest increase in reconstruction costs at 2.8 percent. Read why much of it may have been attributable to a big boom in the Dakotas. -
The South continues trend of slower replacement cost growth
At 2.6 percent, the South was the slowest growing region, with Washington, D.C., the big anomaly. Find out why.
Scott Amussen is vice president of property products for Verisk Insurance Solutions–Underwriting. He was an assistant vice president for Xactware's 360Value. He can be contacted at jsamussen@verisk.com
If you’d like to keep track of reconstruction costs changes, sign up to receive the 360Value Quarterly Cost Update.