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  • Agribusiness Risk Underwriters

Lumber Prices Have Skyrocketed. Are Your Clients Properly Insured?

Many things have changed in the world in the last two years, and the impact of the global Covid-19 pandemic has created heartache and hardship for many families and businesses. In addition, severe supply chain disruptions and sharp price increases have contributed to economic woes for consumers.


  • Prior to the pandemic, the average cost of lumber over the last 10 years has been very consistent, with commodities prices averaging about $350 per 1,000 board feet.

  • However, the cost of Lumber has skyrocketed in the last two years, and prices are historically high, at over $1,100 per 1,000 board feet as of February 7th, 2022.

  • This means current Lumber prices are more than 300% of the 10 year average. Source:


Severe increases in the cost of lumber have resulted in sharply increased costs of both CONSTRUCTION and REPAIRS. These increased costs are relevant to your insurance in two specific ways.

  1. Making sure your clients have enough insurance to repair/replace property insured on their policy:

    1. Example: for the last 10 years, the average cost to build a Broiler House has been about $10 per square foot.

    2. Current broiler house construction costs are between $15 - $16 per square foot, a 50-60% increase. Breeder / layer houses are far more, up to $25 per square foot.

    3. If insurance coverage is based on the previous, pre-pandemic costs of construction, because costs have increased so dramatically, your customers will not have enough insurance to replace their property if they lost it today.

  2. Making sure your book of business is meeting their policy’s requirements:

    1. Most insurance policies have a requirement to purchase a certain minimum amount of insurance.

    2. This required minimum amount is relevant to the actual costs to repair or replace the property. As costs increase, the minimum amount they are required to purchase also increases.

    3. If they do not purchase the minimum insurance required, penalties may be assessed prior to any claim payment being made to them.

These are things that insurance companies and brokers should be talking to clients about. If you believe your customers are underinsured, schedule a call to discuss insurance options with ARU. Review your policies and ensure your book of business is covered in the event of a disaster!


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