Inflation is affecting every part of the United States, including the housing market. The median home sale price in Reno-Sparks has more than tripled since 2010 and construction costs are also rising. As that happens, homeowner's insurance has to keep pace with inflation. Those rates are typically adjusted every year, automatically.
"We have an inflation writer in the policy that will increase," Christina Kantrud, State Farm Insurance Agent said. "It will look at the market rate index every year and it will increase."
Kantrud recommends that clients cover their home's replacement value at 100% but says it is not necessary to over-insure your home. There are some other things they can do to help themselves.
"It's really important, especially, right now, that homeowners are meeting with their insurance agent and doing an insurance and financial review or insurance checkup, once a year," Kantrud said.
Eric Beer and Tom Swan met with their agent about 10 months before the Pinehaven Fire swept through their Caughlin Ranch neighborhood. Their home was one of five destroyed in the fire in November 2020.
"When we left the house, we thought it was just smoke intensity, so we left the neighborhood, thinking we were coming back that night or the next morning," Beer said.
They are renting their neighbor's house while theirs is being rebuilt. The could move back in this fall if not sooner. Dealing with their insurance company was a challenge though.
"The insurance company said it was too much money, that they didn't want to put that kind of money into it," Beer said.
The company eventually paid to rebuild the $1.7 million home but the new house will be different. The original house was 4,500 square feet. The new one will be 4,000 square feet. Beer says they dealt with eight different insurance adjusters and there was a lot of back-and-forth before the issues were resolved.
"We were quite satisfied with that conversation as far as upgrading the insurance needs for personal property, for replacement value, all that," Beer said.
Beer did not say who they buy insurance from. Kantrud says that State Farm's goal is to replace homes to be as similar to the original as possible.
"If you've flown in marble from a different country, we want to make sure that when we replace your home, we can add that same exact marble flooring that you had before," Kantrud said.
That is why she encourages annual meetings and for each homeowner to take inventory of their belongings.
"It's important that they also go through with a camera, write everything down, so not only can we replace on the outside of the home and the structure but we can also replace what's on the inside," Kantrud said.
She says doing that also speeds up the process for clients if they do have a situation where they have to rebuild.
