4 Steps to Disaster-Proof Your Home and Finances
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The Fiscal Times
October 18, 2013

It’s nearly one-year since Superstorm Sandy devastated the Jersey Shore, destroyed the Rockaways, and crippled parts of Manhattan, including the subway system and tunnels.   Even though the 2013 hurricane season has been one of the weakest in decades, the recent flooding in Colorado, wildfires in California, and tornadoes throughout the Midwest have left thousands of Americans homeless, hoping that their insurance covers the damage.

Such events may be occurring with even more frequency in coming years, as climate change has many experts predicting an increase in natural disasters, with our region expected to be particularly hard hit. A report released last year by Munich Re, the world’s biggest reinsurance firm declared that “nowhere in the world is the rising number of natural catastrophes more evident than in North America.” Even so, just 36 percent of Americans said they had made preparations for disaster, according to a study last year by YouGov.

RELATED: 10 DEVASTATING NATURAL DISASTERS OF THE PAST DECADE

While it’s impossible to fully mitigate the risks posed by a natural disaster, there are steps families can long before disaster strikes that will help protect their homes and their finances.

Plan ahead: Have a family meeting to devise a plan of the steps each person would take in the event of an emergency and the items for which they’d be responsible in the event of an evacuation. Write down everyone’s role and keep the list in an easily accessible place, including smart phones. Make sure all adults in your family know how to turn off utilities like gas and electricity. “If you wait until a crisis to start making decisions, you’ll make sub-optimal choices and forget things,’ says Harry Rhulen, author of Disaster Ready People for a Disaster Ready America.

If you have children in school, determine who will pick them up during a disaster. Select a meeting place where your family will gather if separated or unable to return home, and designate an out-of-state family member with whom everyone should call and check in. Send that person (or keep in a safe deposit box) copies of any documents like deeds, wills, and vehicle titles, which you might not have access to after a disaster.

Use a video camera or an app like the one offered by the Insurance Information Institute to take an inventory of all your jewelry, electronics and other valuable belongings, so that you’ll have easy access to it if you need to make an insurance claim.

Gather Supplies: You’ll want to create two emergency kits, one with supplies for your home and the other with items you’d need to take with you in a car in the event of an evacuation. Both kits should include basic first aid supplies, a flashlight, a few hundred dollars in cash (since ATM machines may not be working), drinking water, and nutrition bars. Your at-home stash should also include several days’ worth of nonperishable food, a manual can opener, a battery-powered radio, and any medication family members might need. (If you have pets, don’t forget to include enough food and water for them as well.)

If you live in a home that’s prone to power outages after severe storms or snow, having a professionally installed generator could make it safer and easier to stay in your home. A working sump pump is a must-have for homes that are subject to flooding. Keep at least one corded phone and a solar-powered cell phone charger. Remember, when phone lines are down and cell towers are jammed, you may have more luck getting out text messages than placing voice calls.

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Check Your Insurance: Two in three homes are underinsured, according to Nationwide Insurance, putting millions of people at risk for a financial disaster following a natural one. Homes should be insured for the amount it would cost to rebuild, not for their current value in the real estate market.

In addition to getting the valuation right, take a close look at the terms and conditions of the policy itself to make sure that you’ve got appropriate coverage. “Insurers have been sharpening the exclusions and limitations on policies and reacting to disasters by eliminating or capping coverage for certain hazards,” says Amy Bach, executive director of United Policyholders, a consumer advocacy group. “That requires consumers to be more proactive to fill in the coverage gaps.”

RELATED: HURRICANES AND EARTHQUAKES MAY ROCK YOUR INSURANCE

Homeowners who live anywhere near a body of water should purchase flood coverage via the National Flood Insurance Program. That coverage is capped at $250,000. If you need more than that, some private insurers will sell you supplemental coverage that kicks in after you’ve claimed the $250,000.

You may also need additional coverage for earthquakes, mold, landslides, or wind damage caused by hurricanes or tornadoes. Most policies do cover wildfire damage, but some require that you have your home fire-proofed to their standards. Enter your zip code at DisasterSafety.org to see to which risks your home is most vulnerable. Keep in mind that many wind and earthquake policies can include a deductible of 2 percent to 10 percent of a home’s value, so you should make sure that your emergency fund has enough cash to cover that.

Get Your Home in Shape: If you live in a hurricane- or tornado-prone area, installing permanent, wind-proof shutters could protect your property from falling trees and flying debris. Garage doors are also particularly vulnerable in such storms, so consider up-grading to a stormproof version.

Homeowners in an earthquake zone should make sure their property is up to code, and secure large, heavy objects like bookcases and appliances to the walls. Those vulnerable to wildfires should move vegetation and yard debris away from their home and use make sure that all landscaping and building materials is flame-resistant.

Still, while you can lower the risk of damage, the worst natural disasters will make short work of such preparations, which is why it’s so important to have a safety plan and proper insurance. “There’s really only so much you can do in terms of home improvement when you’re going head-to-head with Mother Nature,” says Jim Cobb, author of Prepper’s Home Defense.

Life + Money Editor Beth Braverman covers all things personal finance. Formerly a senior reporter and social media editor at MONEY magazine, she’s also held gigs as a newspaper reporter and trade magazine editor.