Hurricane Preparedness: How to Prepare Your Finances for a Natural Disaster
Hurricane Florence is now a Category 4 storm, and could reach Category 5 strength by Tuesday, according to the National Hurricane Center. “Life-threatening” storm surges are likely along the South Carolina, North Carolina, and Virginia coasts. Damaging winds and life-threatening flooding are also expected.
More than 1 million people living in coastal South Carolina, North Carolina, and Virginia have already been ordered to evacuate. A state of emergency has been declared in all three states, as well as Maryland, with residents being urged to take steps to prepare for the storm.
For people living in the path of the hurricane, being prepared means stocking up on water, food, batteries, first aid supplies, and other essentials, as well as getting your home ready for high winds and possible flooding. But preparing for a hurricane – or any natural disaster – also means being financially ready. Here are five things you can do to ensure you can ride out a natural disaster and start the recovery process as quickly as possible.
1. Gather all your important documents
Before disaster strikes, gather and make copies of essential documents, like birth certificates, marriage license, Social Security cards, and passports. You’ll also want to include your insurance information, a copy of your mortgage or the deed to your house, and information about your income. You may need these documents to qualify for assistance after a disaster and get insurance claims started.
Make sure you also gather information about bills you pay, including contact information for your creditors. You’ll need to contact them if a disaster makes it difficult for you to make on-time payments. FEMA has a checklist you can use to make sure you have all the documents you need.
Store your documents – whether paper copies or digital — in a safe place. Keep originals in a watertight or fireproof box that’s easy to grab if you must evacuate. You can also store digital copies on an external hard drive or flash drive.
2. Review your insurance coverage
FEMA suggests reviewing all your insurance policies before disaster strikes to make sure they are still up to date. Remember, your homeowners or renters policy probably doesn’t cover damage caused by floods and earthquakes. You’ll need a separate policy to get that protection.
Renters who don’t already have it should consider renters insurance, since their landlord’s insurance probably won’t cover the cost of replacing their personal property. Remember: You must purchase insurance before you need it.
3. Complete a home inventory
Having a list of your possessions will make it much easier to file a claim if disaster strikes. The Insurance Information Institute has some guidelines for completing your home inventory, including taking pictures and using an app to make a record of all your belongings. This inventory can also be useful if you claim any casualty losses on your taxes, notes the IRS.
4. Keep cash on hand
ATMs may not work and banks may be closed during a natural disaster. Stores may not be able to process credit or debit card transactions. Keep some cash on hand in your emergency kit so that you can still make essential purchases. Consider what your family’s basic needs would be for food, gas, and other necessities when deciding how much cash to set aside.
5. Have an emergency fund
Experiencing a disaster can be a major financial shock. You may need money for gas, hotel, and food if you have to evacuate. You could be forced to take unpaid time off of work, or worse, lose your job altogether. Home repairs are costly, and insurance claims take time to process.
A healthy emergency fund will help you manage the cost of a disaster as you get back on your feet. Experts recommend having three to six months of living expenses on hand, but even $1,000 can be enough to cover some essentials in the immediate aftermath of a crisis.
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