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Demand surge refers to a significant increase in the cost of repairs or replacements after a large-scale disaster. This surge occurs when a large number of properties are damaged simultaneously, leading to a shortage of skilled labor and construction materials.
For example, after a major hurricane, the demand for contractors, building materials, and specialized equipment can skyrocket. This increased demand can drive up prices, making it more expensive to repair or rebuild damaged properties.
Insurance companies are aware of this phenomenon and may factor it into their calculations when setting premiums and adjusting claims. However, it’s important to note that demand surges can be unpredictable and can significantly impact the cost of recovering from a disaster.
At PSIC, we understand that unexpected events, like natural disasters, can significantly impact your property and lead to increased repair costs. When a catastrophic event occurs, it can create a surge in demand for construction materials and labor, driving up prices.
That’s why it’s important to accurately assess the value of your property when purchasing insurance. We encourage you to work closely with your insurance agent to determine the appropriate coverage limits. The value you set at the time of purchase will be used to calculate your claim payment in the event of a loss.
To ensure you’re adequately protected, consider increasing your coverage limits. This can provide additional financial security in case of a major disaster.
Remember, your insurance policy is a safety net. By understanding the potential impact of demand surges and working with your agent to choose the right coverage, you can protect your financial future.
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Copyright © McGraw Insurance Services, L.P., Delaware L.P., 5515 E. La Palma Ave. Ste. 150, Anaheim, CA 92807, License 0K06900 / National Producer No. 17486061 The insurance policy, not the contents of this website, forms the contract between the insured and the insurance company. The policy may contain limits, exclusions and limitations that are not detailed on this website. Coverage may differ by state.
