Since the COVID-19 pandemic, many things have changed regarding how insurance claims are handled and the time frame in which they are resolved. What used to be a quick process has now become a slow and uncertain journey as the world continues to try and re-balance itself. One of the most difficult things to evaluate is the demand for materials and the supply chain that provides them. Other factors include inflation and climate change obligations.
While it may not be clear to you how supply and demand affect insurance claims, it's rather simple. If you file a claim and it is approved, you will need to have the required supplies to rebuild or repair your home. When demand is high, supply must be able to keep pace with demand. When supply is lower than normal, it can cause extensive delays resulting in a much longer time frame for making the much-needed repairs. There are times when demand and supply chain are in sync, however. That is when the claims process goes smoothly, with fewer delays.
When supply is low and demand is high, the result is a dramatic rise in prices. The higher the prices, the less the homeowners will be able to purchase with the amount of money they receive from their insurance claim. This means two things. Either they can buy much less than they need, or they will be forced to buy lower-quality items to replace everything they have lost. This is a frustrating dilemma that many homeowners face.
One of the ways to counteract this problem is to increase your insurance amount. While this will raise your premiums, it is a better option than having to do without many of the things you need in your home. Ask your insurance provider for a review of your homeowners' policy. They will be able to help you figure out the increase in coverage you need. Reviewing your policy yearly is the best way to ensure you get the best coverage.
Another trend affecting the insurance industry is the need to address climate change issues. Climate change has been an ongoing environmental issue for decades. The continual need for renewable resources has pushed the climate change debate to the frontline regarding supplying what is needed to provide materials when insurance claims are filed. The insurance industry is caught in the middle of the debate and must deal with both sides of the issue.
If you are concerned that you may not have enough insurance coverage due to today's high costs and increased demands, contact us at Little & Sons Insurance Services. Our team of experienced and well-qualified insurance agents will create customized home insurance coverage plans for all your needs.
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