What if it happened here......

What if it happened here......

This is crazy!
Recently, it seems like every week brings us news of a new natural disaster. It is not clear if there is just more reporting of such disasters or if there is greater occurrence. What seems indisputable though is that the intensity of such events is increasing: Puerto Rico just suffered its worst hurricane ever, right after Houston got hit by a one-thousand-year flood and Florida was threatened with a category-5 hurricane with Tampa being exposed to its first hurricane in ninety-two years.
While we certainly can’t totally insulate ourselves from natural disasters, being prepared helps us better cope with the threat to personal safety and the potentially costly repairs that such disasters pose.
If there was any doubt, indications from the aftermath of the recent natural disasters show that preparation is the key to mitigating such risks.

What’s considered a natural disaster? A more formal definition is it is a sudden, catastrophic event caused by natural processes of the Earth, according to a recent punditcafe.com article. The key word here is “sudden”.

As you’re aware, certain geographic areas are more prone to certain types of natural disasters.
Regional Disasters  - Natural Disasters by Region.

  • Hurricanes
  • Floods,
  • Earthquakes
  • Tornadoes
  • Wildfires
  • Blizzards

There are three main areas of preparation for a natural disaster:

  1. Structural/Environmental
    1. Reinforcing your home/building and its surroundings to withstand extraordinary natural forces.
  2. Personal Safety and Comfort
    1. Protecting life and health during and after a disaster.
  3. Financial and Insurance Considerations
    1. Making sure that your property is adequately insured against disasters most common in your area.

Building Codes

A good reason to have your home up to code is that the newer codes do really make a difference in mitigating the effects of natural disasters. Data is still being collected but the recent hurricane in Florida showed that homes built to the more recent code standard fared much, much better than those that were not.

Of course, it’d be best to have your home fully compliant with the latest building codes. However, this could be expensive especially for much older homes. So, at a minimum you should be aware of how close to the current building code your home is. If your home is out of code compliance and you need to rebuild for whatever reason, the property will have to be brought up to code to obtain the necessary regulatory clearance. This could be much more expensive than anticipated.

Most home insurance policies have a “Building Ordinance” provision to cover this but a) it’s typically set at only ten percent of your overall coverage and b) not all policies automatically include this feature.

You should, as closely as practicable, follow the environmental guidelines issued by your city, county or state. For example, if you live in a high brush area with a high risk of wildfires, most cities recommended that you have at least a fifty-foot clearing around your home. Not only does this help with insurance rates but it greatly assists fire fighters if a wildfire threatens your property.

To the extent possible, you should have a backup energy source such as a generator. There are numerous types of such units available for sale at almost every price point. When choosing a generator, you should consider the possible difficulty of obtaining fuel for that generator after a disaster.

Personal Safety and Comfort
Planning resources

There are numerous organizations and other entities that do a fantastic job of not only helping folks prepare for a natural disaster but do a great job of helping them in the aftermath of such events. One such organization is the American Red Cross. It’s unnecessary to reinvent the wheel by delving into the details here but searching for Disaster Preparedness on any search engine will yield several well-written and informative articles.

Financial and Insurance Issues
Rebuilding after a disaster

Rebuilding and replacement efforts in the wake of a natural disaster are some of the most stressful times in a person’s life. This stress could be compounded by having inadequate insurance to cover those costs or by encountering hassles when filing a claim.  There are three areas of concern when it comes to insurance for a natural disaster:

  1. Adequate coverage.
  2. Ease of filing a claim.
  3. Documentation to support a claim.

Adequate coverage refers not only to the amount of the coverage but also the type of coverage. Your Homeowners Insurance policy will cover wind, hail, fire and theft, in addition to providing liability coverage. But in California, homeowners need to also consider Flood insurance and Earthquake insurance.

Flood Insurance
A recent article in the Washington Post stated, only twenty percent of homeowners affected by the floods in Houston had flood insurance. It was not stated in the article but usually the only homeowners who purchased flood insurance were those who were mandated to do so by their mortgage lenders. Cost is the reason most homeowners give for not purchasing flood or earthquake insurance.

Eighty percent of homes flooded during the recent storms will have to be repaired by the homeowners themselves. The irony of the situation is that if your home is not in a designated high-risk flood zone you can still purchase flood insurance and it’s typically cheaper that if your home was in such a zone. So even if your mortgage lender doesn’t require you to have flood insurance you can and should, still buy coverage.

Earthquake Insurance
Scenes of the suffering from recent seismic activity around the world show us that we, especially in California, need to be prepared for that eventuality. Anecdotal data suggest that earthquakes are increasing in frequency and intensity.

Because earthquake insurance is not mandated by anyone, the participation rate for this type of insurance is even lower than that for flood insurance. The Los Angeles Times recently reported that only seventeen percent of California homeowners purchase earthquake insurance. Are you one of them?

Filing a claim after a natural disaster
This is obvious but, filing a claim after a natural disaster will be much easier if you have handy, the necessary details to file that claim.

You should always store in a safe place, a hard copy document with your insurance policy number and the contact information of your broker or insurance company. Having a copy on your phone is OK but if your phone fails (battery or other damage), you won’t be able to retrieve that data.

You should also make photos of your important physical assets just in case they are needed to substantiate claims.

This overview is meant to bring the issue of preparedness to the forefront of our planning. Like most contingency plans, it’s very important, but not urgent to plan for natural disasters. We must guard against allowing this fact to lull us into a false sense of security.