Dear valued client,
Markets rallied at the beginning of the week, rising 5.65% on Monday and Tuesday alone – an encouraging sign as weekly gains were posted this afternoon.
Energy continues to be at the forefront of global affairs. This week saw the impasse involving the European Union and OPEC members (15 countries that make up the Organization of the Petroleum Exporting). EU politicians are attempting to impose policy that would regulate the price of oil given the short supply coming from Russia. In retaliation, many OPEC members have committed to a cut in production of 2 million barrels a day, in order to continue to profit to the degree they believe they are entitled. I don’t believe that artificially manipulating the supply of global oil (and therefore energy) is the most ethical and wise route to take, but I also believe government intervention in free markets almost inevitably produces deleterious outcomes. Hopefully, this dispute can be resolved before the winter months set in.
I’d like to spend a bit of time emphasizing the importance of having protection against financial loss as part of your financial plan, especially as it pertains to Hurricane Ian which recently ripped through Florida.
For some Floridian homeowners, recovery from Ian will verge on the impossible. In addition to the 75 lives lost, so few residents owned flood insurance. In Lee County (home to Fort Myers), for instance, a colossal 72% of houses are not covered by flood policies. As we get further inland to Seminole County and Orlando’s Orange County, 97% of residences are not covered by flood insurance. In fact, the number of homes with flood insurance in Florida declined over the past 5 years, from 17.8% to 15.4%.
Why is this? One reason is that flood insurance is only required in “high-risk” zones. If you’re living away from the coast, you may not opt to obtain flood insurance because of the rather expensive premiums. Another reason is the mistaken belief that flooding is included in hurricane coverage as part of one’s homeowner’s policy – it’s not.
Ian is estimated to have caused roughly $63 billion in damages. Entire family fortunes have been wiped out. Many are still seeking basic needs like food, water, and shelter.
Moral of the story? You never know when the storm will come, only that it will… eventually. It is imperative to take the proper precautions and include the appropriate financial safeguards for when catastrophe strikes. You wouldn’t want years of investments to vanish as a result of one unfortunate event.
Should you have any questions regarding personal insurance (life insurance, critical illness, disability) or any other type of insurance, please give me a call.
“The best investment in the world is the one that pays the most when you need it the most – and that’s life insurance.” – Ben Feldman
Have a terrific weekend,
PW
