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As increases slow, reconstruction costs show signs of stabilizing

Verisk recently released its latest 360Value® Quarterly Reconstruction Cost Analysis, which offers an overview of current reconstruction cost trends at the national and state levels for the United States from January 2022 to January 2023.

Lumber, a key driver in reconstruction cost peaks in recent years, has decreased nine months in a row.

Total reconstruction costs, including materials and retail labor, increased 6.8% from January 2022 to January 2023. This slight drop follows the 9.3% increase from October 2021 to October 2022. Quarterly reconstruction costs increased by 0.9%, a small shift from the 1.1% increase last quarter.

All states see increases in reconstruction costs

Residential costs in total increased 7.5% from January 2022 to January 2023 and 0.4% from October 2022 to January 2023. For residential reconstruction costs, Florida had the largest increase at 12.4%, followed by South Carolina (11.0%) and New Mexico (10.7%). Arizona’s rank changed most significantly, rising from the 47th-highest cost increase in October 2022 to the ninth-highest in January 2023.

Commercial costs in total increased 6.1% from January 2022 to January 2023 and 1.3% from October 2022 to January 2023. Florida had the largest increase in commercial reconstruction costs at 11.0%, followed by Utah (9.5%) and New Mexico (9.4%). Louisiana had the largest shift in rank, rising from the 47th-highest cost increase in October 2022 to the 13th-highest in January 2023.

Slowing down and steadying

Reconstruction cost increases have started to slow down and steady. Lumber, a key driver in reconstruction cost peaks in recent years, has decreased nine months in a row. This quarter, the composite is the only negative category, declining 5.1%. However, costs remain 61% higher than in pre-COVID times.

Interior trim increased the most among material composites, rising 22.1% from January 2022 to January 2023 due to the specialized skills used to manufacture pieces. Roofing followed shortly behind at 16.5%.

The cost of fuel used to transport and manufacture goods is decreasing for the first time since February 1, 2021.

How’s your property book holding up to the latest inflation surges?

Ensuring insurance to value (ITV) is good for you and your policyholders: They’re better protected in the event of a total loss, and you collect premiums appropriate to the risk. Amid inflationary pressures, 360Value is offering a review of your book of business. Sign up today if you’re interested.

Read the latest 360Value Quarterly Reconstruction Cost Analysis for more information on this quarterly's rises and explore your book of business today.


Trish Hopkinson

Trish Hopkinson is Head of 360Value, for Verisk. You can reach Trish at thopkinson@verisk.com.

Joel Teemant

Joel Teemant is product director, 360Value commercial lines, for Verisk. He can be reached at jteemant@verisk.com.


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