Better Budgeting: Preparing for Natural Disasters

Preparing for Natural Disasters

Credit Wise (featured column)
by Jennifer Wallis

As an Oklahoman, I feel like I’m pretty much an expert when it comes to natural disasters. I live smack dab in the middle of tornado alley. Every spring and sometimes fall, twisters wobble their way along the plains. Sometimes, they dissipate before they do any real damage. Other times, they damage a few trees, which is considered a fortunate casualty in the big scheme of things. Still other times, these monsters decimate entire communities like they did this week in Central Oklahoma. Several communities suffered significant damage, lives were lost, and selfless volunteers are still working around the clock to help clean up as I write this.

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Here’s the thing with many emergencies such as floods, fires, tornadoes, mudslides, earthquakes, and hurricanes: we often don’t know they are coming. With some you have more advance warning than others. But, the time to prepare for them is now. Review the following questions to protect yourself and your family financially in case you’re not so lucky the next time disaster strikes.

If you’re a renter, do you have renter’s insurance? 

Renter’s insurance protects your personal property from theft, fire, and other loss. It can even cover the cost of helping you find another place to live if yours is damaged. Some disasters such as floods and earthquakes may require additional coverage. When I was a renter, I never had renter’s insurance. I figured it was too expensive. I was shocked to find out that you can purchase quite a bit of coverage for just a couple of hundred dollars per year.

Do you have life insurance?

Losing your stuff is one thing but thinking about losing your life is quite another. Unfortunately, it can be a reality for some. When my husband and I had children, we sat down and had a serious discussion. If one of us died, the other would probably not be able to afford to care for our children and stay in our current home on one income. We needed life insurance so that if something happened to one of us, the other would be able to stay in the home and not worry financially. We were surprised to find out how affordable life insurance really is. For the cost of a couple of dinners out per month, you could ensure your family’s financial security in the event of the loss of your spouse. Isn’t that worth it? Of course, we hope that day never comes but knowing that money isn’t something else we would have to struggle with in the midst of tragedy is great comfort.

Have you taken a personal property inventory?

Look around your house. Could you remember every single thing you own if you had to list it from memory? It’s a great idea to start now and write down everything significant that you own, how much it cost, and when you bought it. There are personal inventory lists online you can use. Another great idea is to take a video inventory so you’ll at least be able to remember to claim things that can easily be forgotten.

Are your valuables secured?

If you have large amounts of cash, jewelry, or important financial paperwork consider placing them in the bank or a safe-deposit box at your local financial institution instead of keeping them at your home. If your home is unexpectedly destroyed, those irreplaceable items may be lost forever.

Is your home properly covered?

If you own your home, you’ll want to make sure that you have the right amount of homeowner’s insurance to replace your belongings in case of a disaster. Review your policy to make sure you have enough coverage. Many policies don’t cover flood insurance so if you could be at risk, it may be worth the additional money to add it.

No one likes to think of the worst case scenario but when it happens, you’ll be thankful that you planned ahead. While many have been lucky to escape with their lives, it will take a long time to recover-emotionally, physically, and financially. For a small amount of money, you can buy peace of mind and security in case the next disaster heads your way. I know it may sound like it but I don’t sell insurance. I’ve just found myself in the situation time and again where I’m fortunate that I have it.

The greatest things in life aren’t things. They’re the loved ones in your life. Your things can be replaced. But, with some preparation, replacing them can be a lot less expensive.

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Copyright © 2013 by Jennifer Wallis. All rights reserved.

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