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  • USA: Millions of homes are underinsured against natural disasters as construction costs keep rising
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USA: Millions of homes are underinsured against natural disasters as construction costs keep rising

Source(s):  CNBC

By Diana Olick

Extreme weather, from floods to wildfires to high-category hurricanes, is causing ever more damage to neighborhoods. Now, new research shows that much of the nation’s housing stock may be underinsured against these disasters.

The cost of rebuilding has risen significantly in the past two years and continues to rise, due to a severe construction labor shortage as well as new tariffs on materials. If these increased costs are not factored regularly into insurance coverage in disaster-prone areas, homeowners will be left with huge losses that could even resonate through the mortgage market. 

[...]

“Underinsurance issues can cause financial devastation for property owners, artificially low coverage limits for insurance carriers, and increased loan delinquencies,” said Amy Gromowski, senior leader analytics at CoreLogic. “Homeowners who experience natural hazard events, such as the California wildfires, are often struck by personal and financial devastation and many aren’t able to rebuild their homes, which prolongs the region’s recovery and often causes homeowners to default on their mortgages.”

[...]



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  • Publication date 03 May 2019

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