In December 2019, housing starts on an annualized basis surpassed 1 million for the first time since July 2007, according to U.S. Census data analyzed by the Economic Research Federal Reserve Bank of St. Louis. New home construction was finally set to pick up where it left off before the Great Recession. Then came the pandemic.

While COVID-19 put the brakes on home starts, it didn't last for long. By August of 2020, the housing market was back up to over 1 million new homes a month, and we've held steady into 2021.

This bodes well not only for the housing market—a key barometer of the economy—but also for property-casualty agents whose construction clients are thinking about building more new homes and even expanding into surrounding communities.

Housing construction is poised to reach new heights this year. The National Association of Home Builders' (NAHB) Housing Market Index has been at over 80 since September 2020—the highest it's ever been—a welcome indicator of renewed confidence and improving conditions.

The current low interest rates and a significant inventory shortfall have combined to make the housing market hot. New home construction is also driving commercial growth as schools and shopping centers are built to support new communities.

In the builders risk insurance market, which includes materials, fixtures and the equipment to be installed during the course of construction or renovation, we're seeing double-digit increases in insured housing units in nearly every state. Growth is quite strong in the Southeast and Texas, as well as in parts of the Midwest and West.

For agents, it's a great time to sell builders risk to commercial and personal lines clients. Take a look at your book of business, and identify those who are preparing to build, renovate or remodel. Builders risk policies are easy to quote and bind, especially on average-sized residential construction.

However, agents should note that these four things will be a little different this time around due to COVID-19:

1) Insurer capacity. Look for a carrier that can provide consistent access to insurance as demand increases. Not all providers have allocated the necessary capital to handle the surge in construction activity.

2) Material costs. Building material cost increases have added about $24,000 to the price of a typical home, according to the NAHB. Framing lumber has shot up 180% in just the past year. Make sure the builders risk policy you select has the option to increase the total insured value should materials cost more than planned or clients request contract change orders.

3) Construction delays. Supply chain issues are delaying the delivery of windows and other building components. Understand that construction may take up to one-third longer as you select terms for your clients' builders risk policies, and ask what renewal options are available past 12 months.

4) Renovation and remodeling. Fueled by the pandemic, owners continue to make upgrades to houses and commercial structures. Explore options to comprehensively cover just the renovation and the existing structure when it's needed.

A bright spot in our economy, new home construction is moving at a pace we haven't seen in two decades. Take advantage of this moment as clients build new homes and need insurance.

Alan Ferguson is president of US Assure, where he leads corporate strategy and the day-to-day operational decisions for the company.