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Are You Financially Prepared for A Natural Disaster?

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The following article is by Kristi Muse, our staff writer. She is a freelance writer, blogger, police officer’s wife, and stay at home mom of two. To read more about how she tries to live a balanced life visit her website at Moderate Muse.

Are you financially prepared for a natural disaster?

Flash floods and brush fires have been at the top of the news lately. Four people have now been killed by the floods in Kentucky while hundreds of homes have been damaged or destroyed. Hundreds of California homes have been burned or damaged from the spreading brush fires, despite the best efforts to keep the fires contained.

People lose their property and their lives to hurricanes, earthquakes, tornados, tsunamis, etc. every year. We are powerless to stop the effects of Mother Nature, but we can try to protect ourselves as much as possible by being financially prepared to deal with the aftermath.

Emergencies come in all forms, and you never know when a disaster could strike. Do you feel financially prepared to deal with the after-effects of a natural disaster?

Here are just a few precautionary measures to take to protect your property and your finances in the event of an emergency.

Emergency savings fund

Due to the extreme drought in California, brush fires have burned their way across thousands of acres. One brush fire even jumped the highway and forced drivers to abandon their vehicles on the freeway to flee the flames. In the confusion of the aftermath and clean up, some of those drivers are now facing over $600 in towing fees. If you were one of those drivers, would you have enough money saved to pay for the unexpected expense of a $600 towing fee?

If a hurricane hits your area, you might be forced leave your home and stay in a hotel for as much as a week or more. Would you be able to handle that expense along with paying for meals and gas?

It’s important to make sure that you have an emergency savings fund kept aside to pay for unexpected expenses without putting yourself into debt. Even saving as little as $25 per paycheck to put towards an emergency fund could make the difference between financial security or finding yourself buried in credit card debt and personal loans.

Comprehensive car insurance

Most car insurance plans won’t cover damage done to your vehicle during a natural disaster. If you only have collision coverage, the insurance company will only cover the cost of repair or replacement if another vehicle crashes into your car during the actual event of a natural disaster.

If you want your insurance to cover damage caused as a result of or by the disaster itself, you will have to buy supplemental coverage. You can choose to pay for individual types of natural disaster coverage, or you could pay for comprehensive car insurance which covers all different types of natural disasters. Comprehensive car insurance is more costly on a monthly basis, but depending upon the value of your vehicle, it could very well be worth the extra cost for full coverage.

Understand your home insurance policy

Much like car insurance, most home insurance policies won’t cover so-called “acts of God.” Read the fine print of your policy. If you aren’t sure about the extent of your coverage, talk with an insurance agent about your policy and look into whether or not it would be feasible to add supplemental coverage. Home owners who live in flood plains or areas prone to hurricanes should definitely look into water damage policies. People who live along active fault lines should seriously consider adding earthquake coverage to their insurance policies.

If, like me, you happen to live in an area that gets earthquakes, hurricanes, and tornados you should move…Just kidding. If you love your area so much that you are willing to endure whatever Mother Nature throws at you, then look into how much it would cost to add comprehensive or supplemental coverage to your home. The added up-front cost could save you thousands in the event of a disaster.

Keep an emergency kit in each vehicle and in your home

One easy way to prepare for Natural disasters is to create an emergency preparedness kit to keep in your home and in your vehicles. You could keep all the essentials in a plastic bin or in a back pack that you could easily grab on your way out the door.

If you don’t already have an emergency kit, consider stocking up on a few items at a time. Preparing incrementally will be easier on your wallet than buying all of the items at once. Some items to consider adding to a natural disaster kit are paper towels, a first aid kit, emergency radio, protein bars, chlorine tablets for purifying water, flares, a flashlight, and cash.

Having cash on hand is especially important during an emergency, because banks and ATMs may not have power or be able to function properly. You will want to have enough money on hand to get you through until you can access the rest of your emergency savings fund.

Natural disaster doesn’t have to equal financial disaster

Are you prepared for a natural disaster? You don’t want to be caught unprepared when Mother Nature decides to strike. Taking precautions ahead of time could save you thousands of dollars if your property is damaged by a natural disaster. Make sure you have an emergency kit ready to go at a moment’s notice, start saving money for your emergency fund, and take a close review of your various insurance policies. Don’t let a natural disaster spell financial disaster in your life.

How do you prepare for natural disasters? Do you have supplemental insurance coverage for your home or vehicle?

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{ 20 comments… add one }
  • Nelson July 29, 2015, 12:35 am

    Hey, very informative article Kristi! I didn’t know there were flash floods in Kentucky? Also, good to know about the $600 towing fees in my state. The drought here is awful.

    • Kristi July 29, 2015, 7:06 am

      Thanks, Nelson!

      Unfortunately for the residents there, the flash flooding has been particularly awful in both Kentucky and Indiana this summer. Many people don’t realize that flash floods can happen anywhere that sees significant rainfall in a short period of time.

      Apparently, after the media backlash, the towing companies dropped their fees considerably for those drivers caught in the fire. So you may never have to pay that $600 fee in the case of an emergency =]

  • Ernie Zelinski July 29, 2015, 12:41 am

    When I purchased my half-duplex in 2007, I put $163,000 down and got a mortgage of $162,000. I made myself an Agreement that I would pay off the mortgage in 5 years. I actually paid it off in 4 years. When the mortgage was paid off in June 2011, I started putting aside $1,000 a month in a maintenance account. I have only spent around $4,000 in maintenance since then. So my home maintenance account has around $45,000 in it for unforeseen natural disasters such as the duplex requiring a new roof due to a low flying UFO hitting it or the fence needing replacement due to a stampede of buffalo knocking it down.

    • Kristi July 29, 2015, 7:10 am

      Haha! If only we could all be so prepared for herds of Buffalo trampling our fences. I hope to someday reach your level of financial preparedness, Ernie.

  • Chuck July 29, 2015, 2:20 am

    The best and most succinct article of its type I have read in a long time. I am going to print it out and hang it up. Thank you very much!

  • Maggie July 29, 2015, 8:58 am

    What a timely and fabulous article. We just had our second 6.2 earthquake yesterday in the past year! It definitely got me re-thinking our preparedness for the “Big One.”

    • Kristi July 29, 2015, 12:16 pm

      How terrifying, Maggie! The only earthquakes I feel are tiny in comparison.

  • George July 29, 2015, 9:45 am

    I cringe every hurricane season here in Florida. Homeowner’s insurance is sky high here, if you can get it at all. I have an older home and live near the ocean. Just regular insurance would be $4,000 per year, and flood insurance would be several more thousand.
    So, I go bare. It really keeps you on edge, not just during storm season, but all year round.
    I have lots of food and other necessities to survive on physically, but live on the edge of a knife financially. Stay away natural disasters!!!

    • Kristi July 29, 2015, 12:20 pm

      My husband is from Florida, so I understand that completely. Hurricane season is no joke. The scariest part is not knowing if the storm will go up the coast or around through the gulf. Neither side of the state is safe.

  • George July 29, 2015, 9:47 am

    BTW, great article Kristi!!!

  • There are also some great mobile apps available in the various app stores that can help you prepare and respond in the case of emergencies. You mentioned California, the County of San Diego has an app that address preparation and finding shelters when needed.

    The American Red Cross also has a nice site for planning and preparing: http://www.redcross.org/prepare

    • Kristi July 29, 2015, 12:27 pm

      Thank you for the tips, Bryan. I will definitely check those out. I don’t live in San Diego myself, but I have quite a few friends out there who could benefit from knowing that.

  • Stockbeard July 29, 2015, 12:15 pm

    My goal is to retire in Japan so I can totally relate to this article.

    BTW the $600 towing fee is crazy and something that, as a driver, I would complain about and fight against. Financially ready or not, I’m not paying $600 for a situation that was clearly an emergency, and with the car still begin actually drivable (stated in the linked article)

    • Kristi July 29, 2015, 12:23 pm

      I agree completely! That $600 fee is ridiculous any day, never mind being connected with an emergency. Apparently the media backlash against those companies made them rethink their charges against the owners, and the number went down considerably.

  • Abigail July 30, 2015, 1:58 pm

    We should probably be more prepared for a disaster, although Phoenix isn’t at risk of much. We now, lamentably, have to have a water service, but that does mean we tend to have plenty of water on hand if the water went out.

    But we don’t have a lot of food in the pantry. (My husband’s stomach is so sensitive, it’s practically impossible to know what he’ll be able to eat at that moment. So I’ve given up.)

    And we don’t have an emergency kit at home. Just in the car. Which does, at least, have comprehensive coverage. It’s still worth enough to bother.

  • Kristi July 30, 2015, 6:15 pm

    Phoenix is a beautiful area! I had the privilege of visiting once, and I would love to go back someday.

    I don’t have a ton of food storage space, so I just try to keep about 3-4 days worth of pantry staples on hand at all times. I usually have lentils, cans of soup, canned fruit, and some beans. I don’t go overboard with “prepping” but I just try to keep some easy to prepare foods that I know my picky kids will eat if the power is out for a while.

    I agree that comprehensive auto coverage is definitely worth the cost!

  • Mathieu Lebrun July 31, 2015, 6:57 am

    Nice article, Kristi!
    I should be prepared too, Canada is at risk every now and then. And the $600 fee is definitely ridiculous. Some people just care about their own insurance, not their vehicles or homes. You can just go homeless suddenly by a mere natural disaster ..

    • Kristi July 31, 2015, 2:59 pm

      I imagine that Canada has quite a few unique challenges, especially in the wintertime! You’re right, and it’s a shame that something like a natural disaster can financially ruin families that don’t have the right coverage.

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