Insurance Versus Inflation
Even during low inflationary times, it is wise to evaluate your property insurance needs periodically. Replacement costs keep rising, and even if that is only 2% per year, over 5 years that makes a $100,000 replacement cost $110,400 five years later…..that’s up 10.04% when you compound 2% over 5 years. If inflation is at 4%, that can escalate this number by more than 21% in 5 years! You need to, therefore, constantly re-evaluate your insurance needs.
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