Financially Surviving a Disaster: Are You Prepared?

October 31, 2013

The harsh reality about disasters is that they ruin people financially. A severe storm can destroy homes and businesses and cause damages that far exceed the financial solvency of an individual or family. Because of this sad truth, being financially prepared for a disaster is as important as being physically and emotionally prepared. Planning emergency responses, preparing homes and businesses, and putting together preparedness kits is only part of complete disaster prep. Having a financial recovery plan in place is one of the most critical aspects of setting yourself up for post disaster success. Homes and businesses should both have the proper insurance coverage for a variety of disasters, especially regionally specific disasters that affect a particular area, such as hurricanes or earthquakes.

Businesses, in particular, should have a strong continuity plan in place to begin immediate recovery after a disaster. This includes checklists of things to do in anticipation of a disaster, responses during a disaster, and things to do in the aftermath. Resources for recovery assistance, insurance protocols, and information for employees, suppliers, and vendors are all part of this continuity planning. The most important part of this preparation is ensuring you get the business back to functioning, protect your data, and fulfill financial obligations after a disaster. The Insurance Institute for Business & Home Safety has an online program for business and can be found of their website.

For residential homeowners, it is important to look carefully at your insurance coverage. For example, if you lack flood insurance, as most conventional home owner’s insurance plans do not automatically cover flooding, verifying and correcting this before a flood occurs is in your best interest. Just like any other kind of preparation, preparing financially well before a disaster strikes will ease your recovery. Disasters, no matter how small, are devastating in every sense. No matter how well you prepare, you are never fully prepared for the actual event. The best thing you can do is plan thoroughly before a disaster and work to ensure that your finances and insurance coverage are as prepared as your emergency kit.

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