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By Brian Konrad

Will your insurance be enough to rebuild?

Rising prices for lumber reason to check home insurance coverage

Apr 22, 2021 | 12:02 PM

MEDICINE HAT, AB — With the price of softwood lumber rising nearly 120 per cent in the past year, consumers may be wondering if they have enough insurance if they had to rebuild their home in the wake of a disaster like a fire.

An official with the Insurance Bureau of Canada says that’s a question consumers need to ask their insurance representative.

Rob de Pruis is the director of Consumer and Industry Relations for the Insurance Bureau of Canada.

He says when a person first takes out a home insurance policy, the company will calculate the replacement value, and once in place, there are mechanisms to protect against things like inflation, and adjustments are made yearly.

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de Pruis says there is also what is known as a Guaranteed Replacement Cost endorsement available to consumers.

“What it does is, if you do have a total loss on your home, as long as you’re insured to a value that your insurance company initially came up with, even if there are increases in price fluctuations, you’re not bound by the limit you have in your policy,” according to de Pruis.

“Ultimately your company will be paying the guaranteed replacement cost for similar kind and quality materials,” says de Pruis.

He says it’s always a good idea to let your insurer know about additions or renovations to your property before a loss happens.

de Pruis says the cost of claims is a factor that can affect the premium for a home insurance policy.

But not all claims include lumber as a cost, such as in the case of a flood that would involve replacement of drywall, carpet, shingles, and siding and are not impacted by fluctuations in lumber prices.

The Insurance Bureau of Canada has a toll-free consumer information centre service for people with questions.

They can be reached at 1-844-227-5422.