Dear Agents,

As we move into spring, I wanted to share a couple of thoughts with all of you regarding how we at Heartland Mutual are handling the increasing dwelling values which are calculated from our Replacement Cost Estimator. As you walk through your local grocery stores, home improvement stores, and even get gas for your day-to-day operations, we are all seeing a price increase in our normal daily items. You don’t have to look too far to see that we are all in this together. Now you throw the possibility of spring tornados, hurricanes, hail & windstorm events, even labor and supply chain shortages into the mix and we could be in trouble down the road!


Heartland Mutual has been in the insurance business since 1883 and we always try to look out for the policyholder by making sure they are adequately covered when a loss occurs. Each year, we take a hard look at adjusting our discount programs, increasing our inflation guard, and adjusting our rate structure, so we can keep all of them in line with the environment we all live in. We are faced with the reality that the price of building materials and the items to furnish a home today will not come back down for a while. Even if they do come back down, they most likely will never come back down to what they were before. Therefore, we need to make sure we have adequate coverage amounts on the dwelling and all outbuildings.


We have seen the inflated cost of building materials, material shortages, and the lack of a labor force firsthand with some of our policyholders. For example, a loss that causes partial damage to a building can result in contractor estimates to repair this damage to be just below the coverage amount of the building. Now, you also must throw in the possibility of your policyholder not being back in their home for months, even a year or more, due to a labor/material shortage. Please understand, Heartland Mutual will do everything possible in making sure our policyholders are adequately covered when a loss occurs. This is why we use a 4% inflation factor on policies not tied to the Replacement Cost Estimator at their renewal. For the policies tied directly to the Replacement Cost Estimator, they will move with cost updates at their renewal.


We are sure you have had questions from your policyholders on why their dwelling coverage amount has gone up significantly over the past year. This increase in the dwelling coverage amount is to reflect the increasing costs of the factors discussed above. For example, since December 2021 roofing is up 13.5%, insulation is up 15.2%, drywall is up 15.4%, windows & doors are up 15.75%, appliances are up 12.3%, cabinets are up 15.9%. These are just some examples.


No one is sure if there is an end in sight. Therefore, we all must try to be ready for anything. Please take the time in explaining to your policyholder the reasons why they are seeing an increase in their dwelling coverage amounts. Remember, if their policy is a Preferred or Commander it must be tied to the RCT and insured at 100% of the replacement value.

In other news!

We are expanding our writing territory further north in the next couple of months to now include the following counties: Logan, DeWitt, Piatt, McLean, Woodford, Livingston & Iroquois. If you know of an Agency who is looking to write in these counties, please let them know about us and the products we offer.


We are hoping to host an in-person Agent/CSR Workshop at our office in July! This workshop will be limited to only 20 in-person individuals, so our underwriters can work directly with your staff in navigating and understanding our products better on both the home & farm side. We would encourage each participant to bring their own laptop so they can follow along and work directly with everyone. If you have an employee who can’t attend the in-person event, don’t worry. We will live stream this class just in case. However, I would encourage in-person attendance if possible, to obtain the benefit of one-on-one class training.

Keep an eye out for more information on this class!

Do you have an Agent Succession Plan in place?

If so, we would like to know about it. We have had a couple of Agents decide to retire towards the end of 2021 and now this trend is carrying over into 2022. We are here to help out in any way by making this a smooth transition, possibly with another Heartland Agent if needed.

If you have any questions, please feel free to contact me.

Over the next couple of months, I will be out conducting more Agency visits to answer your questions, plus I will be bringing along some of our Heartland goodies. If you have any special request, please let me know.

Again, we thank you for all your loyal support and understanding as we all continue to move through these uncertain times. If you have any questions, thoughts, or comments, please let me know. Hope to see everyone soon while I am out on agency visits.


Christopher M. Feldt, PFMM, FDMC, Manager

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