Insurance values continue to be more relevant than before!

Increased focus by the insurance industry on increased cost due to pandemic disruptors.

“On average, renovation/remediation costs have increased by 50%, making it crucial to evaluate home values and building limits on a much more detailed level.”
– Cindy Locke, Maxwell Claims


Supply Shortage and Material Expense Increase

  • Increased renovations
  • Increases cost of raw materials
  • Closing of mills cause by Stay-at-Home orders and infections.

Labor Shortage and Increased Renovation Periods

  • Increased renovations
  • Stricter laws and regulations
  • High demand and not enough supply for qualified workers
  • People are less willing to have strangers in their homes due to Covid-19

GroupOne’s Claims Experience

In a recent claim, water leaked from an adjacent unit causing damage to the insured’s unit.

The insured advised the broker that they would have to submit a loss of income claim, along with the water damage claim, due to a loss of rental income.

Restoration to the unit was delayed and not completed in a timely manner due to scarcity of contractors coupled with wait times for relevant materials, all causing a ripple effect which resulted in a loss of rental income.

These combined factors extended what would typically be a weeks’ worth of restoration to 3-6 months.

In this situation, not only has the money that would normally be paid out for a loss increased, but a claim for loss of rental income would normally have been irrelevant had there been no delays in labor and materials.


It is critical that as a trusted Insurance Broker you undertake an annual evaluation of building, contents and business interruption limits with your clients to ensure:

  • Your clients have adequate insurance limits for their property which contemplates regular inflation factors as well as increased cost factors caused by the pandemic disruption.
  • Your clients have current information regarding current markets conditions, standards and disruptors that should be considered in arriving at an adequate limit of insurance.
  • You have fulfilled your fiduciary responsibility in advising your clients of all factors which could impact ease in loss settlement and protected your own E&O!

How to Determine Proper Insurance Limits:

  • Meet with your clients at a minimum of once per year with updated information and communications. Listen to the advice of your clients around the value of their property.
  • Make use of industry tools and calculators available to assist in value determination.
  • Suggest a professional insurance appraisal for higher value properties or if there is a large discrepancy in value limits.
  • Recruit the advise of a contractor who will have a great awareness of cost and time limitations.
  • Remember – market value and insurance value can vary considerably in the current environment!