The Finatical

Week of May 24th, 2022 - Home Insurance, Rise of Cross Border E-Commerce, Expansion of Renewable Energy Market

Finatic

Aditya Bagga

Ksheeraj Sanga

, and 3 others

May 24, 2022

An Introduction

Homeowners insurance is a type of property insurance that covers losses and damages to a person's house, as well as furniture and other items in the home. Homeowner’s insurance also includes liability coverage for any incidents that occur in the house or on the property. A homeowners insurance coverage is not the same as mortgage insurance. Mortgage insurance is often required by the bank or mortgage company for purchasers who put down less than 20% of the purchase price. It is also required by the Federal Housing Administration for anyone applying for an FHA loan. In this article, we will also cover how homeowners insurance works and why it is important to have it.

What Is Included

A typical home insurance policy covers four types of accidents on the insured property: interior damage, outside damage, loss or damage to personal assets/belongings, and injury while on the property. Every home insurance policy has a liability limit, which defines how much coverage the insured gets in the event of damage. The normal amount is $100,000, but the policyholder can choose a greater maximum. The liability limit specifies the percentage of the coverage amount that would go toward replacing or repairing property structures, personal possessions, and living expenses if you have to live somewhere else while the property is being worked on. It is also important to note that standard home insurance coverage often excludes earthquakes and floods. A homeowner who lives in a region prone to natural disasters may want additional coverage to protect their property from floods or earthquakes. You also have many options when shopping around for home insurance so make sure you see which option is the best for you based on price and coverage included.

The Importance

So why should you have home insurance? Home insurance is not required by law. However, mortgage lenders will want you to obtain house insurance before they would agree to finance your home purchase. Home insurance safeguards the mortgage lender's investment by providing funds to repair or rebuild the home if it is damaged or destroyed by a fire, lightning storm, tornado, or other insured disasters. House insurance may also help protect your home and its contents in the event of theft, loss, or damage to the inside or outside of your home or property. If you are temporarily unable to remain in your house, it may also assist you in covering additional living expenses. Purchasing house insurance will set your mind at ease because you know that you are covered in the possibility of something going wrong with your house.

Financial Trends

Rise of Cross Border E-Commerce

As eCommerce continues to evolve across the world, there has been a recent trend in the demand for cross-border eCommerce in 2022. In the past, people would tend to avoid buying and selling products outside of their country but in the past couple of years, this misconception has started to fade. Experts believe that the recent rise of cross-border eCommerce will amount to be worth 3.5 trillion U.S. dollars. It has also been projected to account for 22 percent of eCommerce shipments containing physical products.

The recent rise of cross-border eCommerce is mainly due to its customers. A recent study by Statista showed that customers prefer cross-border eCommerce because it is cheaper, availability of all brands, and the opportunity to purchase unique products. The benefits of eCommerce for sellers consist of being able to sell products to the entire world, attain a global platform for products, increased engagement, increase revenue, solidify brand authority, and eliminate competitors. There are still some roadblocks the prevent cross-border eCommerce expansion including language barriers, shipping concerns, payment and currency concerns, marketing complications, and different legal regulations for each country. Once these issues are resolved, analytical experts expect cross-border eCommerce to consistently increase the connection between global sellers and customers through an online platform.

Expansion of Renewable Energy Market

The use of renewable electricity capacity additions broke records in 2021 and the demand for biofuels had almost recovered to levels equivalent to that of before the pandemic had started. However, Russia’s invasion of Ukraine has caused major issues in both the energy and agriculture markets, resulting in an unprecedented global crisis regarding energy. In multiple countries, there have been efforts to reduce their dependence on Russian supplies and governments attempting to shelter consumers from higher energy prices. Hence in 2022 and in the future, renewable energy has a high potential to reduce the prices and dependence on fossil fuels for energy both in the long and short term.

For renewable energy and electricity, pre-crisis policies that were set in place have allowed for there to be faster growth in the energy and agricultural markets. As solar PV and wind costs are expected to increase in 2022 and 2023 due to the elevated commodity and freight prices, it will prove to be effective and efficient in the long run due to sharper increases in the cost of natural gas and coal. Renewable energy capacity is projected to increase over 10% in 2022 and reach almost 320 GW (GigaWatt). However, unless there are new policies that are implemented rapidly by governments and energy companies, growth will remain steady in 2023. While there are still concerns with the energy and agricultural market, specifically in the European region, it will trigger an unprecedented policy towards accelerating energy efficiency and renewables.

Financial Guidance

“Money is a terrible master but an excellent servant.” – PT Barnum

Don’t let money drive you and lead to you leading a life pursuing money. Make it work for you so you can build the life you want for yourself.

Money Fact

The term “checks” derives from the game of chess. Similar to “checking” the king limits his movement, using a check limits the chances to forge it or alter it.