Without warning, a flood, fire or other disaster could leave you with a severely damaged home, destroyed belongings and barriers to managing your finances. Many people think of disaster preparedness as having a stockpile of water, canned food, and flashlights, but people also need access to cash and financial services. That’s why it is important to include financial preparedness in your disaster plans. Here is the latest summary of important preparations.
You should have enough insurance to cover the cost to replace or repair your home, car and other valuable property, as well as temporary housing if you are displaced from your home. Those who do not own a home should have renters insurance. Also, make sure that you have the right coverage for the types of disasters likely to occur in your area. For example, homeowner’s insurance does not typically cover events such as flooding or earthquakes, so you may want to consider whether you need additional coverage.
- Periodically review your insurance coverage
- Build and maintain an emergency savings fund
- Sign up for direct deposit of your paycheck or government benefits
- Gather and organize important documents
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Teaching Suggestions
- Ask students to prepare a household inventory with a description and the value of belongings.
- Help students understand that renter’s insurance is important for the protection it provides for their personal property.
Discussion Questions
- How can you protect yourself from flood, fire or other natural disasters?
- Should you consider purchasing flood-related insurance if you don’t live in a coastal area? Why or why not?
- Why is it important to gather and organize important documents before a disaster strikes?
Melissa Hart
Focus on Personal Finance, 7e 