How to Financially Prepare for a Natural Disaster

Natural disasters aren’t just frightening — they can be very expensive, too. Getting financially prepared now can help you rebuild and rebound.

Story by Leah Golden

Natural disasters aren’t just frightening — they can be very expensive, too. Getting financially prepared now can help you rebuild and rebound. Here are four ways to get started:

Create an Emergency Fund

In addition to repairing damage, you may need money to pay for a hotel room if you can’t live in your home. While insurance may cover many expenses, you will still need to cover your plan’s deductible.

How much to save depends on your personal situation, but experts suggest having enough to cover all property and health insurance deductibles for you and your spouse.

Know What’s Covered

Most homeowners insurance plans will pay for repairing or rebuilding your home in case of fire, hurricane, hail, lightning and any other disasters listed on your policy, according to the Insurance Information Institute. However, homeowners often need to purchase flood insurance separately.

If you rent your home, consider renters insurance. Your landlord’s insurance will not cover the replacement costs of your personal property.

Keeping a detailed inventory of your personal items can help with the claims process. Your insurance company may have checklists or recommendations for apps you can use.

Make a Contact List

Even in the wake of a natural disaster, you will still be responsible for making your mortgage, credit card and other payments. Make a list of customer service contact information for each of your bills. That way, if you are affected by a disaster, you can quickly call to request more time to pay them.

Include contact information for your insurance company, too, so you can start the claims process as soon as possible.

Beware of Scams

If you are approached by someone offering to help you with your situation, ask for an official, government-issued photo ID before giving out any personal information.

Federal workers will not ask for or accept money from you. When using contractors for repairs, work with people you know when possible. You can also search for legitimate contractors licensed in Texas on the Better Business Bureau website.

For more information about financial preparedness, check out FEMA’s Emergency Financial First Aid Kit.

Personal Finance