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 When Jason bought his three-bedroom home in northwest Oklahoma City in 2019, he felt confident in the coverage limits on his homeowners insurance policy. But by early 2025, he noticed stories of rising rebuilding costs, labor shortages, and inflated material prices. Curious, he reached out to his insurance agent to review his coverage. What he found surprised him: if his home were damaged in a storm or fire, his policy wouldn't come close to covering the cost to rebuild. That gap in protection is more common than many homeowners realize, especially with the way inflation has impacted construction costs in Oklahoma and across the country. If your policy hasn’t been reviewed or updated recently, now might be the time. Why Inflation Matters for Home InsuranceInflation impacts everything from the cost of lumber to labor. If a severe storm damages your roof, replacing it today might cost significantly more than it did just a couple of years ago. The same goes for flooring, drywall, and appliances. If your coverage limits are based on older values, you might be left paying thousands out of pocket after a claim. Replacement Cost vs. Market ValueOne key thing to understand is the difference between your home’s market value and its replacement cost. Market value is what your home would sell for today, while replacement cost is how much it would cost to rebuild it from the ground up. In a rising cost environment, replacement cost tends to increase faster than market value. If your policy is based on outdated replacement costs, you might find yourself underinsured. Signs Your Policy May Be OutdatedYour homeowners insurance policy might need a closer look if:
The Role of Extended Replacement Cost CoverageExtended replacement cost coverage provides a buffer above your standard policy limit. For example, if your policy covers $250,000 in dwelling protection, extended coverage might increase that by 20% to 25% to account for inflation or surging labor costs after a widespread disaster. This is especially helpful in Oklahoma, where tornadoes and hailstorms can trigger increased demand for repairs, pushing prices up quickly. How Inflation Has Affected Construction in OklahomaThe cost to rebuild a home in Oklahoma City has risen steadily since 2020. Between supply chain disruptions and increased demand for contractors, labor costs alone have gone up. Roofing materials, plumbing components, and even windows are more expensive than just a few years ago. If your policy hasn’t kept pace, you could be relying on coverage limits that are no longer realistic. What to Ask Your Insurance AgentIf you're unsure where your policy stands, ask your agent:
A quick review could give you peace of mind—and better protection. What Happens If You're Underinsured?Let’s say you experience a total loss from a fire or tornado, and the actual cost to rebuild your home is $300,000. If your policy is capped at $225,000, you're on the hook for the remaining $75,000. That kind of financial burden can derail savings, force you into loans, or reduce the quality of your rebuild. Keeping Up With Rising CostsIn a place like Oklahoma City, where severe weather is part of life, keeping your insurance policy up to date with replacement costs is a smart move. Whether you live in Moore, Edmond, Norman, or Midwest City, the same principle applies: rebuild costs change, and so should your policy. Protecting What Matters MostYour home is one of the biggest investments you'll ever make. When inflation creeps into the cost of materials and labor, don’t let your coverage fall behind. A quick policy review can help you avoid surprises and make sure your homeowners insurance is still doing its job. Oklahoma Insurance Professionals is based right here in Oklahoma City and serves surrounding communities with personal and business insurance solutions. We're an independent agency, which means we work with multiple insurance companies to find you the right protection at the right price. Whether you're reviewing your replacement costs or updating your homeowners insurance policy after a remodel, we're here to help. Reach out today to make sure your coverage is up to date.
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