image credit: Freedigitalphotos.net
I’m financially preparing for disaster. My family has been notified by FEMA that our home is now in a flood zone—already, preemptively declared an emergency.
You see, we live on a river. Upstream is a very effective flood-control dam. In the 15 years our home has been here—it hasn’t flooded. We’ve been here since 2004 and have never even been concerned about the water. We couldn’t even get quoted on flood insurance because it was deemed unnecessary.
That all changed after a storm last year that put pressure on the dam, and an earthen abutment that supports the dam was seriously compromised.
Now we’ve got our flood insurance, and we’re preparing for the worst. As you can imagine, that includes sandbags and plastic bins and high shelves, but there’s also some financial preparedness that is key to surviving a disaster intact.
Steps to financially weathering the storm
Read your insurance policy:
We live in a condominium, so our insurance works like renter’s insurance. We cover anything not nailed to the house (furniture, personal articles, appliances) they cover flooring, drywall, windows, carpets and the building itself. This means I had to read both policies to verify our actual coverage! In the end, I discovered that neither policy will cover loss of use on our building. If we can’t live here—we still have to pay the mortgage, and we aren’t provided any money to pay for a hotel. Thank goodness that mom has an extra room big enough for the whole family. If the dam fails however, our losses are projected to be catastrophic—and we may be at mom’s house a couple of years until our place is rebuilt. I’m working with a broker to create a specific “loss of use” policy to cover our time out of our house if we have to evacuate long-term.
Document your belongings:
Our insurance policy will only cover the value of our items—which means we’ll have to itemize everything we want covered. We’re doing this with a digital camera. Going room-by-room and taking photographs. Receipts for high-dollar items like the piano, and appliances need to be packed in a plastic bag and put with our evacuation “stuff.”
Put things you need during/after the disaster OUTSIDE the disaster zone:
There’s a bin in the house where the “stuff” goes. This is everything we need to recover.
Banking info
Insurance Policy
Blockwatch phone list
Critical papers including recipts for appliances, etc, the kids’ adoption papers, etc.
These things aren’t “valuables” per se but it’s doubtful if we could put our lives back together easily without them.
Also in this bin is a disk with the photos of our belongings (backed up on Shutterfly in case we have to send them to our adjuster—they can be sent electronically immediately).
The bin is big enough for 3 days of clothes for each member of the family, our prescription medications and a bag of pet food. The emergency bin will go with us when we evacuate.
In the event that the evacuation order comes—the kids can pack remainder of the bin while I pile up the sandbags and move some valuables. Our insurance policy also provides $1000 towards sandbagging and $1000 towards removal of items that may otherwise become claim items (i.e. art, jewelry).
Save the money!
Our deductible is $1,000. It’s set aside in a separate bank account until the dam upstream from us is repaired—a five-year dedicated fund planned for flood, so we don’t find ourselves in a financial pinch paying the deductible and staying on our feet—however damp they may be.
Do you have a plan?
It sounds strange living a stone’s throw away from a river, but our disaster plan was really only prepared for the “3 days 3 ways” to stay put in our home in case of ice/snow, earthquake or power outage—we found our emergency plan totally unprepared for evacuation, and our home ill-prepared to meet the requirements of our insurance company. Have you considered and prepared for local and regional disasters that may force evacuation from your home?
