Weather Disasters: Do You Have the Right Insurance?
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Your Money Briefing. Money and Market Stories from The Wall Street Journal. I'm J.R. Whalen in New York. Before the next round of natural disasters erupts, homeowners might want to review their insurance policies to make sure they're covered in case the unthinkable happens. We'll have details in a moment. First, these money headlines. The price of oil fell to its lowest level in almost six weeks after data came out indicating rising petroleum inventories in the U.S.,
How has this year’s series of weather disasters revealed gaps in homeowners' insurance?
Prices have also come under pressure in recent weeks following a decision in late June by OPEC and partner producers like Russia to begin ramping up crude production after more than a year of holding back output. The move came in response to surging prices this spring, boosted by geopolitical risk to supply in Iran. And if the idea of retiring to a small town sounds like the perfect way to relax after decades of hard work, Check out the Journal Reports story on WSJ.com that offers five reasons why you might not want to do that. Among them, that small town might not stay small for long, and you might have to deal with years-long waiting lists for health care. This is your Money Briefing from The Wall Street Journal.
Welcome back, everybody. The devastating images of flooding and wildfires this year brings to light the fact that many homeowners in the path of disaster do not have proper insurance. And Wall Street Journal reporter Nicole Friedman is here to discuss. So, Nicole, the issue of inadequate homeowners insurance became very pronounced after last year's round of disasters.
We had a really dramatic catastrophe season in 2017. There were three major hurricanes, Harvey, Irma, and Maria. And there were also devastating wildfires in California. And all of those events really brought to light that many homeowners who thought they were adequately insured actually were not fully covered for the cost of rebuilding after those disasters.
And one thing you and reporter Leslie Sism brought out in your story is that many homeowners overlook the fact that standard homeowners and coverage excludes coverage for flooding.
Yes. And this has been true for many decades, but it still confuses homeowners today. And it really came to light after Hurricane Harvey when we saw torrential flooding in the Houston area. And it's estimated that more than half of the flooding damage was not covered by insurance. And so historically, homeowners coverage does not cover flooding. And so people have to buy an additional insurance policy, usually from the federal government.
So it's a good idea for homeowners to not only go ahead and purchase additional insurance if they need it, but also review their current insurance policy and check the limits.
Yes, we definitely encourage everyone to actually read their insurance policy. I know it's boring and legalistic and difficult to understand, and so it can be helpful to have an insurance agent or somebody else walk you through to make sure you really understand what you're buying because the limit might not end up fully covering the cost of rebuilding your home.
And insurance companies, they've made policies less generous over time. So it's a good idea to really review the numbers also.
Yes, this is a common criticism from consumer advocates that some of the burden of repaying has been shifted to homeowners over time, whether that's through higher deductibles or lower limits or more restrictions on what is covered.
And in the event that disaster strikes, it's a good idea to have an inventory of your belongings.
This is something that can be pretty burdensome after an event as an insurance company often will ask for a full list of the belongings that were destroyed. And that could end up being everything in your home with as much detail as possible. So the make and the model and maybe even receipts to show what you bought and when.
And don't keep that list inside the house, even inside of a safe.
Right. Because if the house is destroyed or there's a flood or a fire, that list might go with it.
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