Did you know that PIA’s company council, The PIA Partnership, has conducted nationwide research about the insurance buying preferences of small business owners?
The research is encouraging because it found that small business owners strongly prefer independent insurance agents as they make choices in today’s online world.
However, the results also serve as a wake-up call that agents must take steps to continue to demonstrate their value and also be more engaged online.
PIA and the companies belonging to The PIA Partnership have created a public website that helps agents understand PIA’s findings.
PIA members also have access to a private website containing a series of strategies and tools to help them stay ahead of online competition in commercial lines.
To access the newest PIA Partnership project, Small Business Insurance & The Internet — The Voice of the Commercial Lines Customer.
If you are not a PIA member and want to access all of the tools available through this program, contact us for a membership application or visit us online at www.pianational.org/header-utility-items/join/Join-PIA
N. Washington St., Alexandria, VA 22314-2353 www.pianet.com | membership@pianet.org | (703) 836-9340
Insurance Price Regulation: An Important APCIA Report | 7
The American Property Casualty Insurance Association (APCIA) took a shot at the overregulation of insurance and published a report titled, Price Regulation and its Effects on Insurance Markets: Analysis and Case Studies.
Executives & Insurance: Not Enough Coverage | 8
Sentry Insurance did its annual survey of executives and their company’s insurance coverage and checked in with 1,000 business owners and C-suite leaders.
The Most Dangerous Month of the Year | 9
The personal injury law firm, Malloy Law Offices took a look at the most dangerous times of the year for auto crashes and accidents.
PIA National to Congress:
Protect Crop Insurance & Avoid Cuts | 12
PIA National, along with a coalition of fellow crop insurance stakeholders, sent Congressional leaders a letter urging them to protect crop insurance from funding cuts in the Fiscal Year 2026 (FY26) budget and appropriations process.
S&P Global Market Intelligence: Worries about Homeowners Rates | 14
We all know homeowners’ rates are rising. Many of us are facing double-digit hikes. S&P Global Market Intelligence (S&P GMI) just released a report saying, to the surprise of most of us, that Midwest states are seeing the biggest increases.
California: LA Wildfire Damages, State Farm & Rate Hikes | 15
A report issued by the University of California at Los Angeles (UCLA) says economic losses from the devastating wildfires in and around Los
Angeles will hit somewhere between $95 billion and $164 billion.
A Bipartisan Effort to Control Wildfires | 17
A bill has been introduced in the U.S. Senate by a California Democrat, a Colorado Democrat and two Montana Republicans to create a federal response to the wildfire crisis that has beset the West and other parts of the country.
Forget Universal Health Care:
Texas Looking State Run Auto Insurance | 22 Universal healthcare advocates have nothing on State Sen. Roland Gutierrez.
Part of Homeowners Insurance Cost Rise Explained: Dramatic Increases in Reconstruction Costs | 23
Trish Hopkinson heads up Verisk’s 360Value. She, and her team, recently looked at a decade of residential and commercial reconstruction costs.
All users of ACORD Forms must be properly licensed through ACORD.
Agents accessing ACORD Forms through their agency management system or other third-party software are required to claim a license annually .
Most PIA members are eligible for a complimentary annual ACORD Forms license.
PIA FOR NEBRASKA AND IOWA
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INSURANCE PRICE REGULATION
An Important APCIA Report
The American Property Casualty Insurance Association (APCIA) took a shot at the overregulation of insurance and published a report titled, Price Regulation and its Effects on Insurance Markets: Analysis and Case Studies. The author is insurance expert and University of Iowa professor of finance Dr. Martin Grace.
APCIA Senior Vice President Robert Gordon said the report’s conclusion is what most of us already know. Overregulation causes major problems in insurance markets which — eventually — trickles down to consumers.
“Insurance markets function best when allowed to operate competitively, free from excessive price regulation,” Gordon said. “As illustrated in the report, the evidence from multiple state case studies shows that while politically appealing, strict price controls ultimately harm the consumers they aim to protect. Regulatory rate suppression might be a sugar high in the short term, but in the long term it devastates the markets and the availability of insurance for consumers.”
The report notes the most overregulation is in personal lines and suggest regulators should model personal lines pricing after the price freedom found in commercial lines.
“Evidence suggests that the deregulation seen in commercial lines of insurance, which enjoy greater pricing freedom, demonstrates superior performance even after catastrophic events,”
the report said. “This stark contrast with heavily regulated personal lines underscores how market-based solutions enhance resilience and stability. States with competitive markets, like Illinois, consistently show the ability to weather market shocks while maintaining long-term price stability.”
Dr. Grace’s report also notes that regulators often look at price controls as a quick fix.
“While regulation may seem like a quick fix for market pressures, it often creates decadeslong problems that far outlast the temporary conditions that sparked intervention,” the report concluded. “Insurance is voluntary, and companies will exit markets where they cannot operate profitably. The most effective path forward is to allow market forces to determine prices, enabling insurers to price based on risk while fostering competition that naturally protects consumer interests.”
The report looked at case studies in California and Florida, Massachusetts, New Jersey, and South Carolina to come to its conclusions.
Sources: APCIA and Insurance Journal
EXECUTIVES & INSURANCE
NOT ENOUGH COVERAGE
Sentry Insurance did its annual survey of executives and their company’s insurance coverage and checked in with 1,000 business owners and C-suite leaders. This year close to 75% of owners and executives are concerned they don’t have enough insurance and 67% are more stressed about insurance at the beginning of 2025 than they were at the beginning of 2024.
The biggest stressor is economic uncertainty. It worries 47% of executives. Other problems stressing executives and business owners are supply-chain issues, the cost of health care for employees, the shortage of labor and inflation.
Surprisingly, 97% said they have put off up equipment updates for their businesses, cyber security systems and technology. When it comes to cyber security issues, 33% said it is their top concern.
High costs and a lack of resources are the top reasons for not doing critical updates.
When it comes to workers, 38% say they’re going to need more hours with fewer breaks in 2025. They’ll also be asked to do workrelated things that are outside their scope of work or skills.
Close to 50% of the surveyed owners and executives are worried about the impact of a severe event of some kind that will cause them to go out of business, or to pay employees if they stay in business.
Weather is a big concern, too, and 90% said their businesses were hit hard by weather events in the last five years. When it comes to serious events and payroll, 76% of the owners and executives worry their insurance won’t cover six months of payroll after a catastrophic weather event.
Another problem? Litigation and multimillion dollar verdicts from lawsuits are a disturbing possibility to 72% of those surveyed. Over half said they’re seriously thinking about pumping up their liability insurance to cover those costs.
Source: Business Insurance
THE MOST DANGEROUS MONTH OF THE YEAR
The personal injury law firm, Malloy Law Offices took a look at the most dangerous times of the year for auto crashes and accidents. You’d think winter weather would make a winter month the most dangerous time of the year.
Nope. Seann Malloy said the increase in vacation travel, outdoor activities and fireworks makes July the most dangerous time of the year.
"The data makes it clear: July presents unique dangers that we all need to be mindful of,” Malloy said. “These insights emphasize just how important it is to be aware of seasonal risks. When we understand that July is the
top month for accidents, it encourages us to take proactive steps — such as focusing on travel and outdoor safety, handling fireworks responsibly, and prioritizing hydration and heat management. With preparation and public awareness, we can all contribute to safer communities during the summer season.”
Here’s a look at what Malloy found for all months, and ranked them in order from the most dangerous to the least dangerous:
1. July
Total incidents from 2018 - 2023: 108,718
2018–2023 monthly average: 18,119.67
Average accidents per day: 584.51
2. August
Total incidents from 2018 - 2023: 106,602
2018–2023 monthly average: : 17,767
Average accidents per day: 573.13
3. June
Total incidents from 2018 - 2023: 103,161
2018–2023 monthly average: : 17,193.5
Average accidents per day: 573.12
4. September
Total incidents from 2018 - 2023: 101,282
2018–2023 monthly average: : 16,880.33
Average accidents per day: 562.68
5. December
Total incidents from 2018 - 2023: 103,475
2018–2023 monthly average: : 17,245.83
Average accidents per day: 556.32
6. May
Total incidents from 2018 - 2023: 103,213
2018–2023 monthly average: : 17,202.17
Average accidents per day: 554.91
7. October
Total incidents from 2018 - 2023: 102,600
2018–2023 monthly average: : 17,100
Average accidents per day: 551.61
8. November
Total incidents from 2018 - 2023: 98,996
2018–2023 monthly average: : 16,499.33
Average accidents per day: 549.98
9. April
Total incidents from 2018 - 2023: 97,073
2018–2023 monthly average: : 15,168.83
Average accidents per day: 539.29
10. February
Total incidents from 2018 - 2023: 91,103
2018–2023 monthly average: : 16,178.83
Average accidents per day: 538.54
11. January
Total incidents from 2018 - 2023: 100,149
2018–2023 monthly average: : 16,691.5
Average accidents per day: 538.44
12. March
Total incidents from 2018 - 2023: 99,539
2018–2023 monthly average: : 16,589.83
Average accidents per day: 535.16
Source: PropertyCasualty360.com
PIA NATIONAL TO CONGRESS PROTECT CROP INSURANCE & AVOID CUTS
PIA National, along with a coalition of fellow crop insurance stakeholders, sent Congressional leaders a letter urging them to protect crop insurance from funding cuts in the Fiscal Year 2026 (FY26) budget and appropriations process.
Corey Weeks is PIA National’s new head of Government Relations. He said this is a critical issue.
“Despite the critical role crop insurance plays in protecting farmers from natural and economic disasters, and its value in supporting rural economies, presidents of both parties have typically tried to cut crop insurance funding using the budget and appropriations process,” Weeks said. “PIA and its allies have, time and again, protected the funding of the crop insurance program and urge Congress to fully support the program in FY26.”
The PIA National letter was sent to key members of the House and Senate appropriations and budget committees. They include PIA Western Alliance state senators, Washington Sen. Patty Murray and Oregon Sen. Jeff Merkley, and Sen. Susan Collins and Sen. Lindsey Graham.
The House members receiving the letter were Rep. Rosa DeLauro, Rep. Brendan Boyle, Rep. Tom Cole and Rep. Jodey Arrington from the U.S. House of Representatives.
Help Build Your Family’s Financial Future With PIA Trust Insurance Plans
As a PIA Member*, you and your employees have access to a variety of high-quality, competitively priced insurance plans. With PIA Trust Insurance Plans, you have the flexibility to customize your protection to best meet your family’s insurance needs. With the exception of Basic Life**, your employees are also eligible to apply for all of the plans without your participation.
& Dismemberment
States][DC,GU,MP,PR,VI]
The letter notes the most recent farm bill legislation has emphasized the management of risk. That emphasis has protected the interests of the American taxpayer.
“Farmers spend as much as $6.8 billion per year of their own money to purchase insurance from the private sector,” the letter said. “On average, farmers also must incur losses of almost 30 percent before their insurance coverage pays an indemnity. Crop insurance allows producers to customize their policies to their individual farm and financial needs and policies are based on fundamental market principles, which means higher risk areas and higher value crops pay higher premiums for insurance. Crop insurance and its links to
conservation further ensure that the program is a good investment for taxpayers.”
The letter also refers to a survey done last year that points out the U.S. farm economy is close to, or already in, a recession. PIA National says that’s because of commodity price hikes and fewer benefits from the Title 1 farm programs.
PIA National says it is continuing to advocate for the protection of the crop insurance program this year and will remain vigilant against any attempts to cut the program during the upcoming Farm Bill reauthorization process.
Sources: PIA National and PropertyCasualty360.com
S&P GLOBAL MARKET INTELLIGENCE
Worries about Homeowners Rates
We all know homeowners’ rates are rising. Many of us are facing double-digit hikes. S&P Global Market Intelligence (S&P GMI) just released a report saying, to the surprise of most of us, that Midwest states are seeing the biggest increases.
American Family Insurance leads the top 10 insurers with the highest rate increases.
The average effective rate increase for 2024 was 10.4%. That’s down from the 12.7% in 2023. While being down sounds good, S&P GMI says that’s an almost 24% average when looking at the last two years.
S&P GMI says 33 states saw double-digit hikes with the states of Montana and Washington seeing rates going up over 20%. Iowa, Minnesota and Utah also saw 20% average rate increases.
Nebraska had the highest rate increases in 2024 and averaged 22.7%.
The S&P GMI report also noted that the top 10 insurers increased their homeowners insurance costs by 45% over the six years between 2019 and 2024. Here are the averages for 2024: American Family Insurance — 16.5% Liberty Mutual — 14.5%
CALIFORNIA: LA WILDFIRE DAMAGES, STATE FARM & RATE HIKES
A report issued by the University of California at Los Angeles (UCLA) says economic losses from the devastating wildfires in and around Los Angeles will hit somewhere between $95 billion and $164 billion. Economists Zhiyun Li and William Yu noted the damages will drop the area’s 2025 domestic product by $4.6 billion — or about 0.5%.
“In terms of economic magnitude, it’s very big,” Li said. “It takes time for the local economy to recover from it, and whether it recovers remains to be seen.”
When all is said and done, Li and Yu think the wildfires will rank second to Hurricane Katrina as the biggest disaster to ever hit the U.S. And as those in insurance already know, the report notes not all losses from this devastation will be insured.
In the meantime, State Farm has written a letter to the California Department of Insurance asking for a rate increase for the homeowners it covers. And State Farm wants those increases to happen immediately that it says will “help avert a dire situation.”
If approved the rate hikes will average 22%.
Breaking it down, non-tenant homeowners would see a 22% jump, renters and condo owners will be given an average increase of 15% and rental dwellings could see increases of 38%.
The letter from State Farm wants the increases to go into effect on May 1st. On a news release issued on its website, State Farm said it will need the increased cash flow to pay future claims.
“As of February 1st, State Farm General (Fire only) has received more than 8,700 claims and has already paid more than $1 billion to customers,” the news release said. "State Farm General will ultimately pay out significantly more, as collectively these fires will be the costliest disasters in the history of State Farm General.”
This request comes after State Farm received permission to raise rates 20% in January of 2024 and after it requested another 30% average hike for homeowners insurance last summer.
“Insurance will cost more for customers in California going forward because the risk is greater in California,” State Farm’s website statement said. “We must appropriately match price to risk. That is foundational to how insurance works.”
California Department of Insurance spokesman, Gabriel Sanchez said the department is reviewing the new application, however, he said it sparks worries over the stability of the company.
“State Farm General’s rate filings raise serious questions about its financial condition, Sanchez said. “To protect millions of California consumers and the integrity of our residential property insurance market, the department will respond with urgency and transparency.”
Consumer Watchdog disagrees with the department’s assessment of the company’s financial strength. Executive Director Carmen Balber said S&P Global has State Farm rated with an AA rating. It’s the second highest possible rating and Balber points out the
company also has $194 billion in surplus and in its reserves.
She wants insurance commissioner, Ricardo Lara and his department to deny the request.
“Consumers who are struggling to rebuild their lives after the wildfires should not be forced to pay higher premiums to prop up State Farm’s bank accounts,” Balber said. “State Farm has failed to demonstrate that an emergency rate increase is necessary.”
Consumer Watchdog also disagrees with the company’s assessment of its finances and what it has going out the door because of the Los Angeles wildfires and other events in California.
Balber said there is no evidence at all that the wildfire claims State Farm will see will come close to approaching $7 billion. Her analysis has State Farm with $4.4 billion in its reserves and surpluses. She also wonders why the company can’t access parent company, State Farm Mutual Automotive Insurance’s $194 billion in surplus and reserves like it did in Texas.
Consumer Watchdog also adds there is a $9 billion reinsurance pledge from the parent company when insurance claims reach $250 million.
As a side note, State Farm insures somewhere around 250,000 homes and over 880,000 automobiles in LA County, and over 1 million homes and 4 million autos around the state.
Sources: PropertyCasualty360.com, Fox Business, Insurance Business America and PropertyCasualty360.com
A BIPARTISAN EFFORT TO CONTROL WILDFIRES
A bill has been introduced in the U.S. Senate by a California Democrat, a Colorado Democrat and two Montana Republicans to create a federal response to the wildfire crisis that has beset the West and other parts of the country.
Montana Republicans Sen. Tim Sheehy and Sen. Steve Daines and California Democrat, Sen. Alex Padilla and Colorado Democrat, Sen. John Hickenlooper want to create the Wildfire Intelligence Agency.
“The scale of the wildfire crisis demands a singular, whole-of-government wildfire intelligence center to foster cross-agency collaboration and save lives,” Padilla said.
Hickenlooper said the agency would coordinate information with the Department of Agriculture, the Department of Commerce and the Department of the Interior.
“Wildfires don’t care about state lines or forest service boundaries,” Hickenlooper said. “A centralized wildfire intelligence center will speed our response to fires and promote crossagency collaboration to tackle them.”
The center will increase the monitoring and imaging that the above agencies cannot do. It will also coordinate federal response with the impacted states and the agencies of those states, with tribal groups, academia and with the private sector controlling wildfire lands.
“As fire season rapidly approaches for Montana, we need all hands on deck to prevent catastrophic disasters,” Daines added. “Sharing information and resources between agencies will undoubtedly help Montana communities take preventive measures and better combat fires and coordinate response efforts.”
How this will fly in Congress is anybody’s guess. With the new Trump administration’s talks about what to do with the Federal Emergency Management Agency (FEMA), putting a new agency in charge of anything might be difficult.
Source: The Hill
Events Calendar 2025
March 6, 2025 Liar!: An Agent's Role in Identifying & Handling Fraud
March 11, 2025 CISR: Insuring Commercial Property
March 11, 2025 Transportation Insurance: A Non-Standard Business Exposure
March 11, 2025 Dawn of New Age or End of the World? Emerging Risks That Make You Wonder
March 13, 2025 Homeowners Endorsements Insureds Don't Want (But Do Need)
March 13, 2025 An Hour with Nicole: Personal Lines: Read the %^&* Form!
March 18-19, 2025 CIC Live Webinar: Commercial Multiline Institute
March 18-19, 2025 CIC Live Webinar: Commercial Multiline Institute
March 18, 2025 How It’s Built, How It’s Used, Will It Survive: Elements of Property Underwriting
March 18, 2025 Why Inadequate EPLI Will Close Your Business (and What to Do About It)
March 19, 2025 Reasons Personal Lines are Broken (and What to Do About It)
March 20, 2025 An Hour with Cathy: I Pay What? How Commercial Policy Deductibles Work
March 25, 2025 CISR: Insuring Personal Auto Exposures
March 25, 2025 Name That Endorsement: Business Auto and Commercial Property Edition
March 25, 2025 Ethics in Insurance - Protecting the Client and the Agency
March 26, 2025 An Hour with Dave: E&O: Talking Exposures with an Attorney NE/IA
March 27, 2025 CPIA 2: Implement for Success
April 1, 2025 CISR: Commercial Casualty 1
Webinar: 1 - 2 PM
Webinar: 8:30 - 4:15 PM
April 1, 2025
Bad Machines, Evil People: The Latest in Cyber
April 1, 2025 Ethics, Diligence, Success: What Agencies Need to Know
April 3, 2025
April 3, 2025
Eroding: The Personal Lines Implosion and What Happens Next
An Hour with Nicole: Making Sense of Homeowners Deductibles (Once and For All!)
April 8, 2025 CPIA 3: Sustain Success
April 8, 2025
Stinkin Rich, Insurance Poor: P&C Coverage Challenges for High-Net-Worth Individuals
April 15-16, 2025 CIC Live Webinar: Agency Management Institute
April 15, 2025
Why Are You Here?! Insurance Issues with the People and Stuff in Your House
April 15, 2025 Flood Insurance: What You Need to Know
April 22, 2025 CISR: Agency Operations
April 24, 2025
May 6, 2025
May 6, 2025
May 6, 2025
May 8, 2025
May 13, 2025
May 13, 2025
May 15, 2025
May 21,
May 22, 2025
May 22, 2025 An Hour with Nicole: Personal Lines: Read the %^&* Form! NE/IA
Webinar: 1 - 2 PM
May 29-30, 2025 Ruble Graduate Seminar All States Des Moines, IA
June 4-5, 2025 CIC: Commercial Property Institute
June 4-5, 2025 CIC: Commercial Property Institute
June 10, 2025 CISR: Elements of Risk Management
June 10, 2025 Definition of Insanity: Common Home and Auto Exposures We Know Are There & Do Nothing About
June 10, 2025 Stinkin Rich, Insurance Poor: P&C Coverage Challenges for High-Net-Worth Individuals
June 12, 2025 Eroding: The Personal Lines Implosion and What Happens Next
June 12, 2025 CGL Endorsements That Will Break Your Policy
June 17, 2025 Why Inadequate EPLI Will Close Your Business (and What to Do About It)
June 17, 2025 An Hour with Cathy: Understanding (Finally!) How Claims Made Policies
June 19, 2025 Commercial Property: Claims, Coverages, Consequences
June 24, 2025
June 25, 2025 An Hour with Dave: Rental Cars: Issues, Answers, Horror Stories
June 26, 2025 Name That Endorsement: Business Auto and Commercial Property Edition
June 26, 2025 Ethics, Diligence, Success: What Agencies Need to Know
July 22-23, 2025 CIC: Personal Lines Institute
July 8, 2025 CISR: Commercial Casualty 2
July 16, 2025 CISR: Insuring Commercial Property
August 5-6, 2025 CIC Life & Health Institute
August 25, 2025 CISR: William T. Hold Seminar
States Omaha, NE
States
Webinar: 8:30 - 4:15 PM
August 28, 2025 CPIA: Loss Control for All Agencies
September 3, 2025 CPIA 1: Position for Success
September 9, 2025 CISR: Agency Operations
September 11-12, 2025 CIC: Commercial Property Institute
September 11-12, 2025 CIC: Commercial Property Institute
October 7, 2025 CISR: Life & Health Essentials
October 9, 2025 CPIA 2: Implement for Success
October 21-22, 2025 CIC: Commercial Multiline Institute
October 21-22, 2025 CIC: Commercial Multiline Institute
October 28, 2025 CISR: Commercial Casualty 1
November 4, 2025 CPIA 3: Sustain Success
November 11, 2025 CISR: Insuring Personal Residential Property
States Live Webinar: 8:30 - 4:15 PM
States Live Webinar: 8:30 - 4:15 PM
States Live Webinar: 8:30 - 4:15 PM
States Des Moines, IA
States Live Webinar: 8 - 5 PM
States Live Webinar: 8:30 - 4:15 PM
States Live Webinar: 8:30 - 4:15 PM
States Omaha, NE
States Live Webinar: 8:30 - 4:15 PM
States Live Webinar: 8:30 - 4:15 PM
November 18-19, 2025 CIC: Commercial Casualty Institute All States Des Moines, IA
November 18-19, 2025 CIC: Commercial Casualty Institute
December 2-3, 2025 Ruble Graduate Seminar
December 9, 2025 CISR: Other Personal Lines Solutions
"Come on, people, concentrate! We need to figure out more things to squeeze milk from!"
States
Webinar: 8 - 5 PM
States Live Webinar: 8:30 - 4:15 PM
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FORGET UNIVERSAL HEALTH CARE TEXAS LOOKING STATE RUN AUTO INSURANCE
Universal healthcare advocates have nothing on State Sen. Roland Gutierrez. He’s taken the premise a step farther and introduced a bill in the Texas Senate to establish a state run auto insurance option.
The senator wants to alleviate the pain of auto insurance growing more unaffordable in the Lone Star State.
If the bill passes, Texas will set up a department to sell Liability, and comprehensive coverages to those who supposedly can’t afford the high rates being offered by auto insurance companies.
It will be administered by the Texas Department of Insurance, the Texas comptroller and the Texas Transportation Commission. Funding will come from premiums and state funding. Some grants will be infused into the mix to start and maintain the reserve fund.
"The bill aims to ensure affordability, accessibility, and competition in the auto
stability and consumer protections," the text of the legislation said.
There will be a sliding scale for a premium structure, and risk-based adjustments will be made to make sure pricing is “fair.”
Things are tough for some Texas insurers as Attorney General Ken Paxton sues several carriers for illegal fees and selling data on over 45 million drivers.
MARKET LEADERS IN TEXAS:
1. Progressive — 18.3% market share
2. State Farm — 17.49% market share
3. Allstate — 10.66% market share
4. Berkshire Hathaway — 9.69% market share
5. USAA Group — 8.81% market share
Source: Insurance Business America
PART OF HOMEOWNERS INSURANCE COST RISE EXPLAINED DRAMATIC
INCREASES IN RECONSTRUCTION COSTS
Trish Hopkinson heads up Verisk’s 360Value. She, and her team, recently looked at a decade of residential and commercial reconstruction costs. Nationwide between October of 2014 and October of 2024, residential reconstruction costs, materials and labor, rose 63.7%.
She said as you know, “Rising reconstruction costs as such can make it more expensive for insurers to pay claims for property damage and increase policy premiums.”
Overall, the largest increases between October of 2014 and 2019 were in the states of Washington, Oregon, Nevada, Idaho, and Kentucky. While the average nationally in that time frame was 19.8%, these states saw hikes of 12.6% to 26.9%.
Nationally, residential construction costs in the five-year period between October of 2019 and October of 2024 averaged 43%. At the individual state level they rose 34% to 44.9% with the PIA Western Alliance states of Montana and Idaho, and Rhode Island, Utah and New Hampshire having the largest increases.
Commercial reconstruction costs looked much the same. They have jumped 58,4% since October of 2014. They rose 16.6% nationally from October of 2014 to October of 2024 but the PIA Western Alliance states of Washington, Oregon Nevada and Idaho, and Minnesota had increases ranging from 11.6% to 25%.
National commercial reconstruction costs looked much like residential costs with an
average increase of 58.4 percent since Oct. 2014.
In the first five years of the studied decade, lumber costs rose 10x from 3.9% and in the last five years of the study, it rose 39.9%.
The bottom line is that the PIA Western Alliance states of Washington, Montana, New Mexico and Hawaii, and Utah were impacted the most in that decade. Washington, Montana and Utah saw the highest rise in lumber costs at over 50%.
“Over the past 10 years, we have seen a dramatic increase in reconstruction costs. In particular, the pandemic had a significant effect on building costs, reporting just over a 25 percent average increase for both commercial (24.3 percent) and residential (25.9 percent) costs from March 2020 through May 2023,”
Hopkinson said. “This trend slowed after the pandemic but the impacts of inflation, labor market strains and supply chain delays still lingered — between April 2023 to October 2024 both commercial (12.4 percent) and residential costs (10.7 percent) continued to grow, averaging an 11.5 percent increase.”
The states of Alaska, Iowa, Indiana, Pennsylvania and Kansas saw the smallest increases.
Veriski’s report also noted going forward we can anticipate growth rates to be more like they were before the pandemic. Prices will go up between January of this year until July at about 2% for residential reconstruction and 2.2% for commercial reconstruction.
