Inflation, marketplace fluctuations, weather trends, interests and other factors have impacted individuals and families this quarter. Continue reading our Q4 Personal Insurance Market Trends Report to dive deeper into these topics.

Weather

Future projected risk data shows that the southeastern portion of the United States is more susceptible to total damage losses. The data provides a mapping tool to help visualize where homeowners are more likely to be affected by weather hazards. With this information, proactive measures must be taken in the reddened areas to mitigate possible damages before weather fluctuations occur. These include coverages such as wind and flood.¹

Between 2008 and 2022, there has been an increase in billion-dollar disasters caused by severe weather. In 2008, there were six severe storms and one major flood. This contrasts significantly with the eighteen severe storms and two major floods by 2023 alone. By the end of Q3, 23 separate billion-dollar weather and climate disasters occurred. To provide a reference point, the estimated disaster cost for 2022 was $23.9B. This year, the estimation has already reached $50.3B, a $26.4B increase. This 2023 estimate still does not include the damage costs for Hurricane Idalia. The estimated total cost of damages over the last seven years exceeds $1T.²

Roughly 75% of federal disasters are flood-related.³ Based on this data, homeowners should prepare as much as they can to help prevent possible losses. Personal Insurance reviews are beneficial and you should work with your broker to help protect what is most important and valuable to you.

Replacement Costs

Throughout the past few years, building costs have significantly increased. In 2022, we saw the following increases in materials:

• 16% Rough Framing/Lumber
• 4% Copper Electrical
• 19% Drywall
• 35% Plastic & Copper Plumbing
• 19% Asphalt Roofing
• 27% Paint
• 17% Windows & Doors
• 3% Concrete⁴

By the end of August 2023, slab doors, insulation, copper pipe, carpet, concrete, clay and bricks have increased by over 5%. Conversely, PVC pipes and copper wire have decreased by about 5%, while plywood and lumber have decreased by more than 20%.⁵

There have been supply chain challenges and a shortage of skilled laborers in recent years. Due to the skilled labor shortage in the construction industry, skilled workers are receiving higher rates. In 2020, the cost throughout each occupation increased and has gradually decreased over time.⁶

Between January and August 2023, there was a 1-1.8% increase in labor costs.⁷

For everyday home appliances, replacement costs have been on the rise. For instance, a new Viking wall oven increased by 16%. In 2021, the oven was valued at $9,800; in 2022, it went up to $11,399. Similarly, a new, sub-zero refrigerator was valued at $19,400 in 2021 and increased to $20,391 in 2022. That is a 5% increase within a single year.⁸

Auto

The automotive industry has seen its own challenges since 2019, including impacts on sales. Three major factors have contributed:

1. Lack of computer chips
2. Plant shutdowns
3. Shortage of ships and containers

¹ https://www.ncei.noaa.gov/access/billions/risk
² https://www.ncei.noaa.gov/access/billions/time-series
³ Chubb Market Trends 2023
⁴ Materials Costs Per BLS (Bureau of Labor Statistics), YOY Averages from Jan 2022- November 2022
2023 Chubb Market Trends Report
⁵ CoreLogic Quarterly Construction Insights 2023
⁶ CoreLogic Quarterly Construction Insights
2023 Chubb Market Trends
⁷ CoreLogic Quarterly Construction Insights 2023
⁸ Data obtained from individual manufacturer websites
2023 Chubb Market Trends Report

Personal Insurance Team