🏗️ Time to Recheck Your Property Insurance Coverage?
If you’re a business or property owner, here’s a question worth asking: Is your insurance coverage still enough to rebuild your building at today’s prices?
With construction costs continuing to rise, many property owners may find themselves underinsured in the event of a major loss.
Your insurance policy has a maximum payout limit, and if that limit hasn’t been updated recently, it might fall short of what it would actually cost to rebuild after a disaster like a fire or storm. Any gap? That’s money you’d have to cover out of pocket.
Let’s take a closer look at why this matters — and how you can protect your property and your budget moving forward.
📈 Why Construction Costs Are Still Rising
Rebuilding your facility after a fire or natural disaster now costs significantly more than just a few years ago.
Here’s why:
- Reconstruction costs increased by 5.2% between April 2024 and April 2025 (Verisk, 2025).
- Between 2020 and 2023, material prices jumped nearly 40% due to global supply chain disruptions (Verisk, 2025).
- New tariffs on construction materials could raise prices again in the near future.
- The construction industry is still battling labor shortages, pushing project timelines and labor rates higher.
These trends create a perfect storm: rebuilding takes longer, costs more, and your insurance policy might not cover it all.
🔍 Why Your Insurance Coverage Limit Matters
Most property insurance policies include a replacement cost limit—the maximum amount the insurer will pay to rebuild your property.
Let’s say:
- You purchased coverage five years ago with a $1.5 million limit.
- Today, rebuilding the same property could cost $1.8 million.
If disaster strikes, you would be $300,000 short. That uncovered cost would come straight out of your business’s budget.
✅ How to Protect Your Property (and Your Finances)
Being proactive with your insurance coverage is the smartest way to avoid surprise expenses.
1. Review Your Policy Annually
Your coverage should evolve with current market conditions. At Neighborhood Insurance Agency, we offer free, no-obligation policy reviews to ensure you’re protected at today’s rebuilding costs.
2. Understand the Type of Coverage You Have
Do you know if your policy is based on:
- Actual Cash Value (ACV): Covers the depreciated value of your building
- Replacement Cost Value (RCV): Covers full rebuilding with current materials and labor
RCV offers more financial protection. While it may cost a little more upfront, it prevents larger out-of-pocket expenses after a loss (Insurance Information Institute, 2023).
3. Explore Optional Coverage Add-ons
Your basic policy might not be enough. Consider:
- Extended Replacement Cost: Adds a buffer if rebuilding costs go beyond your limit
- Loss of Use Coverage: Helps with temporary relocation or loss of business income
- Ordinance or Law Coverage: Pays to bring your building up to modern code if required during repairs
⏰ Don’t Wait for a Claim to Discover a Coverage Gap
If a major loss happens tomorrow, will your policy hold up?
Neighborhood Insurance Agency is ready to help.
We’ll review your policy, explain your options, and recommend the right updates based on today’s costs.
Call/ Text: (714) 285-9990
Email: cs@niacoverage.com