We all know the drill when hurricane season rolls around: sandbags, shutters, flashlights, water, canned goods, etc. But there’s a big part of getting ready that many of us forget – our money.
Being financially prepared for a hurricane can make a huge difference if your home is damaged, you have to leave, or you’re dealing with the aftermath. This simple guide will show you exactly what you need to do to get your finances ready for storm season.
Step 1: Know your insurance inside and out
Your insurance is your financial safety net during a hurricane. Don’t wait until the storm hits to understand it.
Here’s what to do:
- Find your policies: Gather your homeowner’s/renter’s, flood (if applicable), and auto insurance papers.
- Understand what’s covered: Know what each policy covers for hurricane damage (wind, rain, flood). Remember, flood damage usually needs separate flood insurance.
- Check deductibles and limits: Make sure you can afford your deductibles and that your coverage limits are high enough to cover potential losses.
- Verify expiration dates: Make sure that all your policies are current.
- Contact your agent now: If you have any questions about your coverage, call your insurance agent before a storm is on the way.
Step 2: Take stock of what you have (and what you could lose)
Think about what you own. If a hurricane hits, what could get damaged or be lost? This step helps you understand the potential financial impact and prepare for insurance claims.
- Walk through your property (and document!): Go room by room, and around your yard. As you do, consider taking photos or videos of your belongings and the overall condition of your property. This visual record can be incredibly helpful when filing an insurance claim later.
- Estimate repair or replacement costs: For those big items, try to get a rough idea of how much it would cost to repair or completely replace them. This helps you see the potential financial hit.
- Consider valuables and essentials: What are the items that are most valuable to you, either financially or personally? What would be hardest to live without? Keeping these in mind can influence your insurance decisions and what you prioritize protecting.
Step 3: Build your emergency fund
Having readily available emergency funds can make a huge difference if a storm forces you to evacuate, causes job disruptions, or leads to unexpected expenses. Aim to save at least 3 to 6 months’ worth of essential living expenses in an easily accessible savings account or money market fund. This might sound like a lot, but every little bit helps.
How to get started:
- Start saving now: Even small, regular contributions will add up over time. Set up automatic transfers from your checking account to your savings.
- Keep cash handy: Have a reasonable amount of physical cash at home in a secure place. During and after a hurricane, power outages can make ATMs and credit card machines unusable. Small denominations are often most helpful.
- Know your backups: Be aware of your available credit card limits in case of emergencies. Digital payment apps can also be useful, but remember they rely on power and internet connectivity, which might be unreliable after a storm.
Step 4: Document everything important
This step helps you prove what you own for insurance and keeps important info readily available.
- Creating a home inventory: Take photos and videos of each room and significant items. Briefly describe items and note their estimated value. Keep photos or copies of receipts for major purchases.
- Save digital copies securely in the cloud or on an external drive. Keep a physical copy in a waterproof, portable container.
- Gather important documents: Keep all insurance policies (home, flood, auto), bank account details, identification (driver’s license, passport, social security card), and property documents (deed/lease) together.
- Store original documents in a waterproof and fireproof safe at home. Consider keeping a backup set offsite with a trusted contact or in a safe deposit box.
- Make a list of important contact numbers: Insurance agent, bank, and utility companies.
Step 5: Plan for potential evacuation costs
If a hurricane threatens your area, and an evacuation order is issued, leaving might be necessary. This step focuses on preparing financially for those potential expenses.
- Think ahead about costs: Consider what it would realistically cost you to evacuate. Factor in expenses like transportation, accommodations, pet care, food, and supplies.
- Set aside evacuation funds: Try to have a dedicated amount of money readily accessible for these potential evacuation costs. This could be part of your emergency fund or a separate smaller fund. Having cash on hand is also wise, as ATMs and credit card machines might not be working everywhere.
- Know your resources (but don’t depend on them): Research potential assistance that might be available from FEMA or local charities in the event of a declared emergency. Make sure to have your own funds set aside, as this assistance isn’t guaranteed or immediate. Plan to be self-sufficient first.
Step 6: After the storm
Once it’s safe after the hurricane:
- File insurance claims promptly: Contact your homeowner’s/renter’s, flood, and auto insurance companies as soon as possible.
- Document damage thoroughly: Before any cleanup, take detailed photos and videos of all damage to your property and belongings.
- Use your prepared information: Provide your home inventory and gathered financial documents to support your insurance claims, making the process smoother.
- Beware of post-storm scams: Be cautious of unsolicited offers from contractors or aid groups. Always verify credentials and get several repair estimates.
- Explore assistance options: Investigate potential aid from government programs like FEMA and SBA loans, as well as non-profit organizations, for financial recovery.
Step 7: Review and update annually
Make it a yearly habit, before hurricane season starts to refresh your financial preparedness:
- Check insurance: Review your homeowner’s/renter’s, flood, and auto policies. Ensure coverage still meets your needs.
- Update inventory: Walk through your home and update your photo/video inventory of belongings.
- Assess emergency fund: Confirm your emergency savings are still at your target level.
- Review documents: Make sure your important financial and ID documents are current and backups are secure.
Final Thoughts
Getting your finances ready for hurricane season might not be as obvious as buying batteries, but it’s just as important for your future.
Think of these steps as building a financial safety net. By taking a little time now to understand your insurance, save some extra cash, and keep good records, you’ll be in a much better position to handle whatever the storm brings and bounce back more easily.
It’s about protecting yourself and your family in every way possible.
