How to Prepare Financially for a Natural Disaster
Every region of the country has experienced severe weather over the past two years, whether it is flooding, droughts, hurricanes, or winter storms. While it is important to make sure that you are prepared by stocking canned foods, extra water, and possibly buying a generator, it is also important to make sure that your finances have a continuity plan. Therefore, please see below for three tips that can help prepare your financial house to withstand a natural disaster.
1. Know if you live in a flood zone: For many Americans, the risk of flooding is increasing, whether it is from rising sea levels, increased rain, or some combination of factors. By going to the FEMA Flood Map Service Center, homeowners can enter their address and see whether they are in a flood zone. As the weather becomes more volatile, areas that were once considered safe from flooding may now be at risk, and therefore a homeowner will likely need to purchase flood insurance since typical homeowners’ insurance does not cover flood damage. Avoiding the costs associated with flood damage by purchasing insurance is a sound planning strategy for an increasing number of Americans.
2. Keep your financial, household, and medical information in multiple, protected locations: Regardless of what kind of natural disaster occurs, you will need to pay bills, buy food, and purchase prescriptions. To help prevent a natural disaster becoming a financial and human disaster, make sure that you keep copies of your important information (e.g., account passwords, phone numbers for insurance, prescription numbers, etc.) in locations outside your home. This could include a secure cloud storage location, an external hard drive that is kept at a third-party location, or hard copies in a safe deposit box. In our work with independent business owners, we often find that no one considers that one of the most vital resources in modern life is passwords. Without them, you may not be able to access your money or file an insurance claim.
3. Keep cash on hand: It may seem antiquated to keep actual dollar bills in your home, but in the event of a natural disaster, there may not be power for days or weeks, so your credit cards and the ATM may be useless. Therefore, we would encourage people to talk to their local authorities about the natural disaster risks in their area, the time of year they occur, and the likely results. This will help individuals and families plan an emergency source of cash that can be used to cover essential living expenses in the days and weeks following a natural disaster.
While we all hope that we avoid the worst that nature can throw at us, hoping is not a strategy. The good news is that following these three tips can put you and your family in a better position to recover from a future natural disaster.