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Do You Have a Financial Plan For When Mother Nature Strikes Next?
By: DKilby , 10:09 PM GMT on July 02, 2014
As the impending Tropical Storm Arthur concerns those along the east coast ahead of the July Fourth holiday weekend, one can’t help but think of that fact that harmful weather conditions are gripping regions across the U.S., leaving a wake of destruction. Damage from natural disasters not only wreaks havoc on families and their property, it places an enormous financial burden on everyone affected, especially those who aren’t prepared with a rainy-day fund. Even people living in regions of the U.S. that are inclined to severe weather, armed with insurance to cover damages, often are faced with significant reimbursement delays.
When a catastrophic event takes place, such as the recent tornadoes in Nebraska or the flooding in the Midwest, the initial reaction is to assess the damage and deal with the emotional stress, but inevitably, financial stress is not far behind.
According to the Federal Deposit Insurance Corporation (FDIC), nearly 20% of those living in low-income households are “underbanked,” meaning they do not have access to traditional, mainstream financial services. This leaves a large percentage of the population without access to bank loans, even in times of emergency.
In addition, families or individuals who have experienced property damages might be approved for government assistance, but although absolutely necessary and effective, it doesn’t always arrive overnight.
In the case of Hurricane Sandy, thousands of unprepared residents in the Northeast were devastated. Yet, according to a recent article in The Wall Street Journal, of approximately 15,000 New York City residents seeking aid after being hit by the storm in October 2012, only 352 have received monetary funds or home repairs provided by the city. Tens of thousands of people in the New York and New Jersey region are still living in damaged houses or paying double each month - rent on top of mortgage payments - while they await help.
Historically, severe weather was mainly limited to specific regions of the country, enabling people living in those areas to prepare for the worst. Today, harmful weather conditions are highly problematic for just about every corner of the U.S. Being unprepared only makes these disasters more traumatic, so make sure your family has a plan that doesn’t just include a place to go and emergency supply stash, but a place to turn for financial assistance.
Inquire with your local bank or credit union about what to do if your home, property, or car is damaged in the event of a natural disaster. Consider all possible insurance coverage options and make sure you closely review all details with a professional before considering your family fully covered. Talk to your employer about the range of offerings included in your company’s benefit package. Explore state and local government assistance programs that go into effect if your region is hit by a storm, wildfire, or other form of weather-related calamity.
In recent years, we’ve learned that the unthinkable is now a reality when it comes to Mother Nature. Now is the time to become knowledgeable about the options available to you and your family, so that you’re prepared when disaster strikes.
David Kilby currently serves as President at FinFit LLC, a provider of financial education and employer-based lending programs.
The views of the author are his/her own and do not necessarily represent the position of The Weather Company or its parent, IBM.
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