As inflation grows, many consumer goods are affected, from gas to food to clothing to building materials and more. The cost of building materials impacts consumers not just in the cost of newly constructed dwellings, but in property coverage for existing structures. Many property policies allow an insured to add an endorsement to the policy that automatically increases the property coverage on the policy by a given percentage every year. This helps policyholders ensure that if there is a loss to the property, they have sufficient coverage to repair or replace the building.

In light of the current historic inflation the country is experiencing, the Connecticut Insurance Department has issued a notice to insurers reminding them of certain procedures regarding use of inflation factors. There is a maximum percentage increase allowed by the department and if an insurer intends to use or is using a larger inflation percentage, the insurer is required to submit a rate filing via SERFF with actuarial documentation supporting the increased inflation factors. A copy of the notice can be found here.