From hurricanes and flooding on the Eastern Seaboard and Gulf Coast, to earthquakes out West and tornado valley cutting through the Midwest, there aren’t many places in America where you live without any fear of some kind of natural disaster. For many Americans, extreme weather is a seasonal event that shows up like clockwork and keeps us all watching weather reports just in case. While many people have a plan in place to protect their families and even their homes, often finances are forgotten until it’s too late. The right disaster plan can help you stay financially stable even in the face of disaster.
If you’re one of many Americans struggling with debt, because your finances didn’t weather a natural disaster, call at . A finance professional can help assess your situation to offer advice and solutions that can get your life back on track in the wake of the storm. They can also help you build financial strategy that will help you be better prepared for the next time disaster strikes.
Tip #1: Have the right insurance.
A common problem many Americans face after a disaster is realizing they don’t have the right insurance to cover the damage. Suddenly, even though your insurance is current and you’ve been responsible, your home is gone and the insurance provider has no intention of giving you anything. Maybe you had flood insurance, but the house got knocked down by wind. In any case, you’re without your property and lacking any means to replace what you lost.
Make sure you know exactly what kind of insurance you have and what kinds of damage it covers. You may even wish to contact your insurance representatives and run through a few common scenarios to make sure you’re covered. If you rent, make sure to get renter’s insurance that covers these kinds of disasters.
Tip #2: Include financial information in your disaster kit.
In many cases, you will need financial documents when you make any insurance claims on your home and other property. Keep deeds, wills, stock certificates, and proof of residence in sealed, waterproof carriers that can be grabbed quickly in case of an evacuation. Also consider including your bank and credit card statements so you have references to those accounts as well. In addition, having an inventory of property (if possible with photos) will allow insurance adjusters to verify your claims more quickly.
Tip #3: Keep emergency cash on hand.
Particularly if you live in a region with an extreme weather season, such as a tornado or hurricane season, you will want to have an emergency cash fund included alongside your disaster kit. Remember that if a disaster knocks out power, you may not be able to access an ATM to get your cash out.
To figure out how much cash to set aside, consider making a disaster budget. A disaster budget lets you plan spending on a daily basis during a disaster, including food costs for your family and pets, cost for gas if you need to evacuate, money for hotel expenses if you decide to stay in a hotel, and funds to cover daily expenses. In general, you want to have enough cash on hand to cover a week of expenses. If you don’t have money immediately available, consider starting a disaster fund before the season starts and contributing what you can each week.
Tip #4: Don’t ignore warnings.
Being complacent when it comes to natural disasters is one of the easiest ways to ensure you get into trouble. You don’t want to miss boarding up your windows because you waited too long to buy plywood, or risk putting your car directly in the path of a tornado. Don’t go on the assumption that everything is going to be fine—plan for the worst so if and when it happens, you aren’t scrambling.
Tip #5: Don’t put your property at risk.
Take all of the recommended precautions prior to the event in order to protect your property as much as possible. Follow instructions for turning off power and/or appliances if you are forced to evacuate. Don’t leave anything you can’t afford to lose unattended if you evacuate—have it ready so you can grab it and go.
After the disaster is over, don’t turn on damp appliances and make sure all electrical cords are dry. If you have water in your house, turn the main breaker off (even if power has been restored) until you have gotten all the water out. Leave your air conditioner off until the power has been stabilized. Use gas and charcoal grills outdoors only, and run any generators according to the manufacturer’s instructions. The last thing you want is to burn down your house after a disaster.
Tip #6: What to do post-disaster.
While the above tips can help you weather any normal disaster, even the best plan may not be enough to avoid financial hardship if a major disaster strikes your area. These tips will help you get your life back together in the wake of a major disaster:
- Take advantage of grace periods. Many mortgage lenders, utility companies, and even credit card companies will offer grace periods on payment for residents living in a disaster area. You may be able to get 30-day grace periods on your credit cards and up to a 90-day grace period on paying your mortgage. Contact your lenders and creditors to learn about their specific grace periods offered and to confirm that a grace period is in effect.
- Contact your insurance provider immediately. The sooner you contact your claims representative, the sooner you can get the relief money you need. If you have your financial disaster kit in order, the adjuster should be able to make the assessment without an issue and file the claim quickly.
- Check government, charity, and corporate relief options. Government organizations, such as FEMA, may have aid or relief for residents living in a disaster area. Nonprofit charities often show up to the area to offer medical care and even free food for your pets. Even corporate organizations like Tide have truck programs that allow people living in a disaster area to wash their clothes for free. Check local news organizations and talk to friends, family, and neighbors to get relief or aid.
- Be careful with your personal information. Unless it’s a government organization like FEMA or a financial institution like your bank or insurance provider, most aid organizations don’t need things like your social security number. Be wary of anyone asking for this information, as the last thing you want is fraud on top of disaster.
- Don’t wait to file if you need unemployment. If your company closed, you lost your job, or the business is gone, don’t wait to file unemployment. Immediately file for state and federal unemployment benefits.