Hurricane season started early this year and 2020 is only the second instance ever that the World Meteorological Organization has run out of alphabetical names for hurricanes and been forced to use Greek letters. Historically, the wall of water caused by storm surge is the deadliest, most destructive part of a hurricane, and according to real estate analytics firm CoreLogic, some 7.1 million single-family houses and 253,000 multi-family units are at risk. But of course, hurricanes aren’t the only natural disaster we face. There’s also flooding, tornadoes, earthquakes and wildfires.
According to CoreLogic, more than 96% of the total acreage burned in the United States in the past year were in 13 Western states plus Alaska and Florida. In these 15 wildfire-prone states, some 1.9 million single-family residences are at an elevated risk for damage, if not outright destruction. Fremont and Mills Counties, Iowa, lost nearly 100 homes last year to flooding, and the dam breaks in Michigan earlier this year put more than 20,000 houses at risk.
With all this as a backdrop, it’s no wonder that six out of ten Americans told pollsters recently that they believe they’re likely to be impacted personally by a disaster in the next three to five years. But that same study of 2,050 people by the Harris Poll for the American Institute of Certified Public Accountants also found that only 15% of us have created a disaster plan to protect our homes and our finances.
There’s much to do protect ourselves when a major disaster is afoot; and you can never be too ready. Although a hurricane’s path is sometimes unpredictable, most people have some warning before one strikes. But fires, tornadoes, temblors and flash floods don’t always come with advance notice.
Do These Things Now to Get Ahead of Potential Disasters
In the face of a natural disaster, protecting your property and your family from harm should be your top priority, says Gregory Anton, chair of the AICPA’s National CPA Financial Literacy Commission. But in the aftermath, he says, “access to financial resources and personal information is critically important.”
For starters, you are going to need cash. Banks and ATMs likely will be closed or damaged, so you’ll want some money in your pocket to pay for temporary housing, food and other recovery costs. How much money is enough in the event of a natural disaster? To get a handle on what you’ll need. Anton suggests running some calculations now about the cost of lodging, transportation, food and other expenses you’re likely to incur.
Take this step and you’ll be ahead of the game, for the AICPA survey found that only a third of us have a clue what it would cost to recover from a disaster. And that’s even with three out of four respondents saying that such an event would have a moderate to major impact on their finances.
Now’s also a good time to review your insurance policies to be sure you have the right coverage. You may not have enough, but you also may have too much. “Make sure you know what is covered and don’t be afraid to comparison shop periodically to see if switching makes sense,” Anton advises.
These Small Steps Make a Big Impact
It’s also a good idea to make copies of all your important papers, including medical, personal and financial records. Keep a set with you so you can grab them if you have to evacuate and stash another set in a safe place at a distant location, perhaps the home of a relative or your bank’s safe deposit box.
Next, write down the names, phone numbers and account numbers of your banks, mortgage servicers, insurers, lawyers and accountants, and keep your list with your key papers.
Also take an inventory of all your belongings, room by room, and keep it with your documents. This step with make it easier to deal with your insurer, especially if the company questions your claim. Make a complete list or use your cell phone or video camera to film each room, top to bottom.
Retrofit Your Home to Create Additional Layers of Protection
Beyond these financial steps, do whatever you can to protect your dwelling. Admittedly, retrofitting your place is an expensive proposition, but there are a few things you can do that don’t cost much. For example, trim your trees regularly to remove weak branches that can become window-shattering missiles. To keep water at bay, at least as much as possible, seal all your outside wall openings. And make sure your gutters are clear so they can channel as much rain away as they can carry.
Because blackouts can set off a chain reaction of disasters – houses fires often result from candles burned for light, for example, and pipes can freeze when the heat goes off, leading to breaks and flooding – Dan DiClerico at Home Advisor suggests installing a backup generator to keep your power on. You also should plan an evacuation route well ahead of time. Actually, plan a second route, too, just in case your first option is blocked. Try to figure out where you’re going to go, where you are going to stay and, if possible, how long it will be before you can return home.