Selective Study Finds 25% Increase In Major Home Renovation Projects In First Half Of 2021 Compared To End Of 2020

Rhea-AI Summary

The Selective Insurance Group study reveals a significant 25% increase in major home renovation projects in the first half of 2021 compared to December 2020, with 55% of U.S. homeowners undertaking substantial improvements. The South leads with 57% reporting renovations, followed by the West at 55%, the Midwest at 52%, and the Northeast at 54%. Despite challenges like supply chain delays and rising costs, home improvement activity is strong, with 36% focusing on room renovations and 12% adding new rooms. The study indicates a need for homeowners to update insurance coverage to reflect their property’s enhanced value.

Positive

• 25% increase in major home renovation projects compared to December 2020.
• 55% of U.S. homeowners engaged in substantial improvements.
• Leading regions: South (57%), West (55%), Midwest (52%), Northeast (54%).
• 36% of homeowners renovating rooms/basements/attics.
• 15% increase in subcontracting costs year-over-year, indicating strong renovation demand.

Negative

• 23% of homeowners who renovated have not updated their insurance coverage, risking financial loss.
• Supply chain delays and rising material costs may hinder future renovation activity.

BRANCHVILLE, N.J., Aug. 4, 2021 /PRNewswire/ -- Home renovations have increased since the start of 2021, with over half (55%) of U.S. homeowners reporting substantial improvements that boost home values, according to a July survey commissioned by Selective Insurance and conducted by The Harris Poll. This is a 25% increase from a similar Selective and Harris Poll survey conducted in December 2020, indicating a current rise in home improvements despite headlines about supply chain delays, increasing cost of materials, and labor shortages.

The Selective study also found that the South leads the nation in home renovation activity, with 57% of homeowners reporting significant home improvements. The prevalence of home renovations by region follows: Northeast (54%, down from 56% in December 2020), South (57%, up from 40% in December 2020), Midwest (52%, up from 42% in December 2020), and the West (55%, up from 43% in December 2020).

"Selective's study on home renovations reinforces our observations, based on customer interactions, that the current housing and renovation boom remains strong," said Allen Anderson, Senior Vice President, Personal Lines, Selective. "Every home renovation project is unique, but every homeowner needs to protect their investment from future loss. Independent insurance agents help homeowners evaluate their coverage needs and update their insurance to reflect their renovated home's full replacement value."

Among homeowners who improved their homes during the pandemic, just under a quarter (23%) said they hadn't updated their insurance coverage and another 10% said they were unsure.

Additional Insights and Findings

According to the Selective study, U.S. homeowners have been increasingly investing in their properties since the beginning of the pandemic, with the following major home improvement projects reported:

• 36% are renovating a room/basement/attic
• 12% are adding a new room
• 17% are adding a pool/hot tub

Selective saw similar trends among customers who operate contracting businesses. An analysis of Selective's active commercial liability insurance policies identified a 5-10% increase in residential construction payroll and an approximately 15% increase in subcontracting costs year over year from 2019 through 2021. These indicators underscore continued home improvement activity well into 2021 and across the company's commercial lines footprint.

To learn more about Selective's research on major home improvements during the pandemic, visit here.

Survey Methodology:

The Harris Poll, on behalf of Selective Insurance Company of America, conducted online surveys within the United States from December 28-30, 2020 and July 6-8, 2021, by polling 2,057 U.S. adults aged 18+. Results were weighted for demographics where necessary to align respondents with their actual proportions in the population. Propensity score weighting also was used to adjust for respondents' propensity to be online. This online survey is not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including subgroup sample sizes, please contact Katelyn Leondi.

About Selective Insurance Group, Inc.

Selective Insurance Group, Inc. (NASDAQ: SIGI) is a holding company for ten property and casualty insurance companies rated "A" (Excellent) by AM Best. Through independent agents, the insurance companies offer standard and specialty insurance for commercial and personal risks and flood insurance through the National Flood Insurance Program's Write Your Own Program. Selective's unique position as both a leading insurance group and an employer of choice is recognized in a wide variety of awards and honors, including Fortune's Best Workplaces in Financial Services and Insurance in 2021. For more information about Selective, visit www.Selective.com.

Selective offers insurance coverage to meet the unique needs of every home and homeowner across the country. In partnering with independent insurance agents, Selective customers have access to optional coverage enhancements that go above and beyond standard Homeowners insurance protection – including guaranteed replacement cost for non-building structures, theft of jewelry and watches, cash-out option, and more.

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SOURCE Selective Insurance Group, Inc.

FAQ

What does the Selective study reveal about home renovations in 2021?

The study shows a 25% increase in major home renovation projects compared to December 2020, with 55% of homeowners making substantial improvements.

Which region has the highest home renovation activity according to Selective's study?

The South leads with 57% of homeowners reporting significant renovations.

What percentage of homeowners are renovating rooms or basements according to the study?

According to the study, 36% of homeowners are renovating a room, basement, or attic.

How can homeowners ensure they are adequately protected after renovations?

Homeowners are advised to update their insurance coverage to reflect the full replacement value of their renovated homes.

What are the major home improvement projects reported in the Selective study?

Major projects include 36% renovating rooms/basements/attics, 12% adding new rooms, and 17% adding pools or hot tubs.