White Paper Excerpt:

Fuel prices affect both direct and overhead costs for every trade involved in insurance mitigation, repair, and restoration work. Accounting for volatility in fuel prices becomes a challenge when increases outpace the speed at which hourly rates and unit pricing can be adjusted.

During periods of high volatility, contractors will often include contingency clauses in bids to allow for fuel cost changes. Ultimately, how the cost of fuel impacts unit pricing will also be influenced by the current local balance of job supply and demand. The Verisk pricing team understands that the contractor/service provider market may not have had sufficient time to incorporate increased fuel costs into their typical unit pricing, and it remains uncertain whether sudden increases represent a short-term spike or a longer-term market adjustment.