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Wednesday, October 3, 2018

Four Ways to Prepare Financially for a Natural Disaster - Guest Post by H. Davis



Whether it’s an earthquake, flash flood, hurricane, snowstorm, twister or wildfire, the majority of us are at risk of being caught off guard by a natural disaster.

In recent months, we’ve seen wildfires in places like Idaho, and there have also been a number of hurricanes in the Caribbean’s, Florida, and Texas within the past couple years. As a result, thousands of residents have lost their homes, and are unsure if they will ever be able to get back on their feet again.


In addition to the loss of life and emotional trauma, natural disasters can cause financial loss as well. Consider the cost of an emergency evacuation, for example, or the cost of repairing a home after a flash flood or fire. To make matters worse, if your home is built on a weak foundation, you could lose your entire residence within hours.

So, if you haven’t taken the time to design an emergency plan, now is your chance to do so before it’s too late. If you aren’t sure where to start, then here are four things you can do to ensure you and your family are protected in the event of a natural disaster:

Make Sure You’re Covered: Whether you’re buying or renting a home or apartment, you should always make sure that you’re covered in the long run. Although you can legally own a home without having homeowners’ insurance, if you live in an area prone to fires, floods, and other disasters, you may be required to purchase insurance, which isn’t necessarily a bad thing. For residents living in a rental property, you may want to consider getting renters insurance –– if you haven’t already. This, however, still doesn’t guarantee everything will go according to plan.

The truth is, it can be easy for tenants and residents to assume that their valuables are safe and out of harm's way when it comes to Mother Nature. But if you don’t read the fine print on your insurance policy, your insurance could be useless. That said, very few homeowners can actually recall what their policy covers, which can make for a nasty surprise when you’re in a situation that requires you to file a claim. Disability insurance is also something to look into before a disaster hits your community. According to the Council of Disability Awareness, more than a quarter of today’s 20-year-olds will have some sort of disability before they retire. While that statistic is shocking, it also means that every resident will likely benefit from disability insurance later on down the road.

Keep Cash on Hand: Generally speaking, natural disasters have the ability to knock out power in entire communities. This means that if you don’t have access to your online banking information, you can be in a tough situation if you’re forced to pay for things using cash. It’s good practice to have enough cash somewhere in the house to handle necessary purchases until the power in the neighborhood is restored. You generally want to keep anywhere from $200 to $300. That way, you have more breathing room when it comes to certain expenses.

Additionally, you should also make it a point to have cash in small bills. Some neighborhood stores, for example, might not be able to change larger bills after a major disaster like a tornado, and you wouldn’t want to use a $50 bill on a gallon of milk or a small case of water. On the other hand, you also don’t want to pull out $300 in singles either. This could be really difficult for the family to keep up with.

Provide Records: Having insurance for your home won’t be enough if you’re not able to provide proof of what you owned beforehand to an agent. While insurance policies and organizational skills can’t always avoid chaos, having a disaster recovery plan and preventative measures can help make the process easier. Two decades ago, insurance companies used to ask homeowners to fill out a long sheet documenting the damages made to their property. Since we live in the digital age, however, everything is now done online. This means that making a record of your belongings and saving this information is now easier than ever before.

All you need to do is simply walk around your home and make a video of everything damaged using a tablet, smartphone, or any other recording device. As you record and document the damages, it’s also a good idea to provide narration throughout the video as well. You can state the brand of each item, along with an approximate date you purchased it to make the evidence even stronger for a future claim. The best part, it takes less than 30 minutes to make the video.

Prepare for Damages: Do you know how to turn off your electricity, gas, and water? If the answer is “no,” don’t feel bad. Chances are, you’re not alone. If you don’t know how to shut these things off, however, now is the time to learn –– before a disaster hit.

So, if you do sustain property damage from a disaster, contact your agent immediately. If there’s widespread damage, it could take your agent some time to get back to you. In the meantime, check your electricity, water, and most importantly, your gas line, to make sure you don’t have any unexpected leaks. Also, be sure to make written notes that catalog the damages if you don’t have a phone nearby. That way, you don’t forget any details when the adjuster arrives at your home.

In the end, getting prepared for a catastrophic event like a natural disaster is an important task that most us don’t take seriously until it’s too late. However, by taking a little time to prepare – both physically and financially – homeowners can avoid unexpected hardships.
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H. Davis is passionate about sports and enjoys exploring the wilderness. If you can’t find him online reading articles, you might be able to catch him playing football with friends or cheering on the Broncos. Follow him on Twitter at @Davis241. Thanks!

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