MIAMI—Replacement cost levels on insurance policies are at an all-time high. Asset values and policy limits continue to slowly increase, causing overall premiums to grow significantly. So says Michael Shadeed, a director of Insurance Services at Franklin Street.

Replacement cost—pure construction cost to rebuild a structure from a clean piece of dirt to full usage—includes the hard and soft costs of new construction. Shadeed warns there are more strict insurance requirements today, which is part of what is driving rates higher.

“In the past, there weren't analysts to review insurance policies, so mortgage brokers typically did the review,” Shadeed tells GlobeSt.com. “Today, lenders are using more consultants or third-party groups, and a lot of times they recommend maximum coverage—if there was uncovered loss after an accident, the consultant would be the first with a lawsuit.”