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Lumber Price Spike Means Your Homeowners Clients May Be Underinsured

Lumber prices are, if you'll pardon the pun, going through the roof.

Last Thursday, February 18, the price per 1,000 board feet of lumber on the Chicago Mercantile Exchange hit a record $1,004.90. By the close of trading Friday, it had retreated​ to $997.90, but this was up from $478.30 on October 29. One market watcher speaking to CNBC last week predicted another 30 to 35% increase from current prices. 

A boom in home renovation activity in the wake of state stay-at-home orders during the coronavirus pandemic has boosted demand for lumber and steel, experts report. At the same time, lumber mills expected mass job losses last spring to hurt demand, so they cut production. That coupled with other supply chain disruptions​ has combined to reduce available supplies, resulting in soaring prices.

Iron and steel costs are also rising, up more than 15% in the past year​, according to the Associated Home Builders and Contractors.

American History Tellers Podcast Does Series On The Great Chicago Fire

The excellent American History Tellers podcast has just done a three-part series on the Great Chicago Fire of 1871. If you haven't listened to the show before, this is not a dry recitation of history. The host places the listener in the scene being described and relays the story of what happened from the viewpoints of people who were there.

The Chicago fire series barely mentions insurance, but it's a good reminder of why we have building and fire safety codes. In the fall of 1871, Chicago had all the key ingredients for a fire disaster:

• Thousands of wood frame buildings
• A drought
• High winds