Higher Construction Costs Lead to Increased Insurance Rates

Jun 15, 2022

The construction industry is facing their share of challenges lately. COVID-19-related shutdowns are causing ongoing product shortages. Supply chain disruptions are making it difficult to secure materials and leading to project delays. Soaring inflation is causing construction material prices to skyrocket by as much as 26.7%—which is having a direct impact on insurance.

As this article in Insurance Journal explains, the rising construction costs mean many Personal and Commercial Property insurers are raising their rates in response. According to a recent Moody’s Investor Service survey, Homeowners’ insurers expect to increase rates by approximately 7% this year—higher than the average 3-5% increase we’ve seen per year since 2015. Commercial Property insurers predict their rates will rise by 6.5% this year.

In response to these rising rates, there are concerns that:

  • The above-average rate increases won’t be enough to offset the rising construction costs.
  • Regulators will oppose the rate increases, especially for Homeowners’ Insurance in prior-approval states.
  • Insurance rate increases could negatively impact retention rates.

Jencap’s brokers stay ahead of the curve by keeping up with industry trends—like rising construction costs—and understanding the impact it will have on your client’s insurance policies. Regardless of any upcoming changes, Jencap’s broad market access and carrier relationships will give your clients everything they need to secure the best insurance policy available. Contact us to get started.

The Jencap Construction Insurance Team

The Jencap Construction Insurance Team

Jencap’s construction experts specialize in a variety of construction-related coverages—from commercial general liability and professional liability to wrap-ups and workers’ compensation, and beyond. Jencap has dedicated teams of construction brokers for every risk type, account size, and geographic area in the country. We have broad market access to brokerage and binding authority and can offer exclusive program solutions to fit any construction need.
construction | construction coverage | construction insurance | high costs | insurance costs | market trends



Jencap Professional Lines Insurance

Navigating the New Frontiers
of Professional Lines Insurance

From EPLI to Cyber, partnering with an expert professional lines broker makes the rough road much smoother. We live in a world where risks evolve rapidly, especially for businesses. Jencap’s specialized brokers share the six biggest challenges facing the Professional Lines industry today.





Your business and projects are unique. Your insurance coverage should be, too. From new ventures and distressed projects to wrap-up policies and everything in between, we have you and your clients covered. Our broad market access and strong carrier relationships give our retail agency partners the advantage when it comes to sourcing the best coverage available, at the most competitive price. Whether your clients are artisan contractors, construction managers, general contractors, tree trimmers, or any other type of construction industry professional, we custom-build a policy that provides the protection they need.

Stay Informed

Want to receive information from Jencap on timely marketplace trends, hot new product and program launches, and valuable product expertise that will set you up to win? Sign up below to receive email communications from Jencap.

This field is for validation purposes and should be left unchanged.