The Iowa floods, the California wildfires, the earthquakes and typhoons in Asia, and the hurricanes in Florida and the Gulf make us cringe thinking about them. Mother nature is a powerful beast. She does not discriminate, and she does not give warning. We can all relate to going through a natural disaster or know someone who had to go through it. Unfortunately, there are those that do no prepare for the worst. An essential part of being financially secure is planning for the worst. The emergency fund is part of this plan, and taking steps to financially protect yourself from natural disasters is also part of that plan. Here are five steps to help you prepare for a natural disaster.

1. Buy flood insurance. We all remember the images of Hurricane Katrina and the Iowa floods. A flood disaster will destroy your home, and homeowner’s insurance NEVER covers it. Protect your home further with flood insurance purchased from the federal government. You can pick up the maximum coverage for $300 to $600 per year in moderate risk areas. Go to Flood Smart to find a local agent to purchase a policy.
2. Inventory your personal property. If you need to file an insurance claim for your personal property, documentation is crucial to receive the full amount of the value of your stuff. Take photographs of everything worth over $50 in value and create a list. Store the photos or video on a disk with the list and put it in a fire-proof safe or store them online.
3. Keep a large emergency fund. Some states place a larger deductible on claims involving natural disasters such as hurricanes and earthquakes. Make sure you have enough money in your emergency fund to cover your deductible along with additional living expenses. Insurers will pay for additional living expense, but they require you to incur the expense first, and then they reimburse you. Make sure you keep all receipts for temporary housing, eating out, and any other additional costs for being away from your home if you need to vacate during repairs.
4. Upgrade your home. Stronger windows, stronger roof tie-down straps, reinforced footers, and many other upgrades can be performed on your home to strengthen it when it faces a natural disaster. Many insurers give credits to your premium for making these upgrades, because they know that it will reduce the overall damage to your home during a disaster.
5. Get your home re-appraised. As a claims adjuster, I’ve seen so many houses burn half way to the ground only to find that they were under-insured. The scenario is common. You buy an insurance policy ten years ago for $150,000, but the cost of construction has gone up considerably, but the agent failed to increase the coverage each year. Now, that $150,000 house costs $225,000 to reconstruct. Speak to your agent about applying an inflation guard to your policy that increases your coverage amount by 3 to 5% each year. Also, get a professional replacement value appraisal to accurately assess the replacement value of your home. Remember, you DO NOT need to consider land value for the coverage amount on your policy.

Look, I know you don’t want to think about disaster striking you and your family, but it happens and you will be pissed off when you find out how ill-prepared you were for it. Do it for you and for your family.