They don’t warn before they strike, but some common sense precautions help before, during, and after natural disasters.
Tornadoes.
Hurricanes. Floods. Snow storms. Fires. Quakes. Tsunamis. Now how about
climate change? Natural disasters affect people at many levels
physical, financial, psychological, and many more. They devastate homes
and hopes, wreck buildings, destroy crops, and kill people in their
wake. According to the Associated Press, the latest toll in tornado
mayhem in the South is at least 342 across seven states, including 250
in Alabama alone. “The 21st Century has already been marked by
escalating economic losses and human devastation caused by natural
disasters,” the UN Bureau for Crisis Prevention and Recovery noted.
Disaster-proofing Your Finances
As
climate change may cause spooky weather patterns and increasing
possibility of natural disasters, people would do well to financially
prepare for natural disasters. Disaster preparedness consists of the
efforts to plan, mitigate, and manage the damage and sift through the
wreckage.
Cash
During natural disasters, ATMs are down and
access to cash gets very difficult, Larry Palmer, financial advisor with
Morgan Stanley Private Health Management, tells CBSlosangeles.com while
sharing financial advice in the event of a natural disaster. “Keep cash
in different locations, such as your home and place of business in case
one structure doesn’t survive a natural disaster,” he says and adds,
“everyone should have a one month supply of cash in a safe or alternate
place.”
Assets
Since your local financial institution may not
be running in the event of a natural disaster, Palmer cautions to “make
sure your assets are spread out among a few financial institutions and
one should be a national institution.”
It is also better if you lean on one “trustworthy person to be the executor of your estate.”
Financial Account Information
It
is better to share your financial account information with a trusted
friend or relative. Nobody knows what is in store for anybody in the
event of a natural disaster. So, Palmer continues, the trusted person,
“should have a hardcopy of your financial account information and assets
(including passwords) so he/she can access your account in case you
need it.”
Insurance
In most cases, businesses, homes, and cars
are underinsured. You have to make sure “you have comprehensive
insurance for your assets so that any liability you have based on a
natural disaster can be transferred to the insurance company.” Owning an
insurance policy is not the same thing as having a disaster recovery
plan. People assume that insurance companies will take care of
everything. But it doesn’t work like that.
To avoid the prospect
of arguing with insurance adjuster in the wreckage of your home about
what your insurance does and doesn’t cover, marketwire.com points to
Steve Slepcevic, founder of Paramount Disaster Recovery, Inc., as
saying, “having help in documenting the damage, complete with the proper
terminology, significantly increases insurance company settlements and
will often speed up its processing.”
More on Flood Insurance
Flooding
is the number one natural disaster, according to the Federal Emergency
Management Agency (FEMA). Homeowner’s insurance doesn’t cover flood
damage. So, the more information you have about insurance coverage, the
better. Bill Loughborough, founder and CEO of Credit Answers, a
Texas-based debt settlement company, says, “FEMA indicates that only 25
percent of the 10 million homes that lie within high flood risk zones
carry flood insurance.
“In order to obtain flood insurance, you
must live in one of the 20,000 communities that participate in the
National Flood Insurance Program(NFIP), a component of FEMA that handles
flood insurance, floodplain management and flood hazard mapping.”
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