The policy you wrote three years ago was priced for a different market
Building material costs have risen roughly 40 percent since the pandemic began, according to National Association of Home Builders data, with the Bureau of Labor Statistics separately tracking a 19.6 percent increase in construction pricing between January 2020 and January 2024 alone. That’s not a one-time spike that’s since corrected. It’s a sustained shift in what it costs to build in Ohio, and it hasn’t leveled off the way overall inflation has in other categories.
Why this keeps happening
Three factors are driving it at once: material costs that jumped early in the pandemic and never fully retreated, a construction labor market that’s grown less productive even as wages have risen, and supply chains for specialty materials, the kind a custom or luxury home actually uses, that remain tighter than commodity-grade lumber and drywall. None of these are one-year problems. They compound.
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What this means for a policy that hasn’t been reviewed recently
A dwelling limit set in 2021 or 2022 was likely accurate when it was written. Applied against 2026 rebuild costs, it’s probably short by a meaningful margin, and the gap grows every year the policy goes unreviewed. This is the single most common finding in our full asset reviews: not a policy that was written wrong, but one that was never updated as the cost to rebuild kept climbing.
What to do about it
Guaranteed replacement cost coverage is the most durable fix, since it removes the dollar cap entirely rather than trying to guess the right number and hoping construction costs cooperate. Short of that, an annual review against current cost data is the minimum maintenance a high-value policy needs to stay accurate.
Construction costs didn’t spike once and settle. They kept climbing, and most dwelling limits didn’t climb with them.