Property Reconstruction Costs Increase for First-Quarter 2014

January 29, 2014 / 3 min read

JERSEY CITY, N.J., January 29, 2014 — Verisk Insurance Solutions – Underwriting, a unit of Verisk Analytics (Nasdaq:VRSK), today announced the availability of the 360Value Overview of Property Reconstruction Cost Changes – Q1 2014 report for the United States. According to the report, reconstruction costs have increased by an average of 3 percent nationwide compared with one year ago.

Reconstruction cost is the expenditure required to rebuild a property with materials of like kind and quality on the same site location primarily made up of building materials and labor.

The 360Value Overview of Property Reconstruction Cost Changes is a subset of an extensive database of reconstruction cost data researched and published by Xactware, a Verisk Analytics company. It is issued quarterly and provides an indication of how materials, labor, and other costs associated with building reconstruction costs have changed during the past year.

“All states experienced at least 2 percent increases in reconstruction costs during the past year,” said Mike Fulton, vice president of pricing data services at Xactware. “This marks the fourth consecutive quarter with positive growth in reconstruction costs for all states. New York, Arizona, New Mexico, and Vermont had the largest increases, with each state seeing increases of at least 5 percent.”

Other current trends in property reconstruction costs include:

Reconstruction costs for all labor trades tracked by Xactware increased during the past year, with the largest increases seen by roofers, whose labor costs increased almost 15 percent during the past 12 months.
Overall reconstruction materials costs increased slightly during the past year at approximately 1 percent. Several material composites — including lumber and the materials used to construct drywall-based walls — posted modest increases between 5 percent and 6 percent, while costs for interior trim and roofing materials dropped during the past year.

“Even a modest shift in building material and labor prices can have a noticeable effect on a structure’s replacement value,” said Scott Amussen, vice president of property operations at Verisk Underwriting. “The Overview of Property Reconstruction Cost Changes report is a valuable resource that helps insurance professionals better identify pricing trends that can impact their organizations.”

Xactware uses a unique reconstruction cost research methodology that includes the analysis of insurance claims loss estimates, feedback from insurance repair contractors, and surveys of building materials suppliers. All of the reconstruction data researched by Xactware is available for analysis and tracking.

The data contained in this press release and the 360Value Overview of Property Reconstruction Cost Changes is an indicator and should not be used as the basis for underwriting or renewal decisions.

Editor’s Note: The map and charts contained in the 360Value Overview of Property Reconstruction Cost Changes are available for publication upon request.

About Verisk Insurance Solutions – Underwriting
A unit of Verisk Analytics (Nasdaq:VRSK), Verisk Insurance Solutions – Underwriting is a leading source of underwriting information about property/casualty insurance risk. Drawing upon vast experience in data management, predictive modeling, and risk assessment solutions, Verisk Insurance Solutions includes the industry-leading brands of ISO, AIR Worldwide, and Xactware. In the United States and around the world, Verisk Analytics helps

Release: Immediate

Contact:

Erica Helton/Giuseppe Barone
MWW Group (for Verisk Underwriting)
201-507-9500
ehelton@mww.com
gbarone@mww.com