9 Tips for Natural Disaster Prep: How to Protect Your Money and Yourself

Everyone has their recommendations for how to prepare for a natural disaster, whether it’s what to pack or how much water to have stocked up. But what about preparing financially for a disaster?

USA.gov, an official website of the U.S. government, includes financial preparedness as an essential part of any disaster plan. It’s extremely important to know what steps to take if disaster strikes, and that involves knowing your finances are secure. Do you have cash on hand if there’s a power outage? Are your insurance policies, such as natural disaster insurance, all squared away? Do you know exactly how your life insurance works?

In this guide, we’ve compiled a list of nine steps to take to help you prepare your finances for a natural disaster. This will help you learn what moves to make today to better prepare yourself financially for the future.

Have an emergency fund

Having an emergency fund is an important part of any financial plan, including preparations you make for natural disasters. Emergency funds are typically funds you set aside in case something unexpected happens, such as your car breaking down or having to replace your refrigerator. In the case of natural disasters, you’d want an emergency fund in case of damage from floods, hurricanes, wildfires, earthquakes, or other natural events.

One of the easiest ways to set aside emergency funds is by opening a separate high-yield savings account. The idea is to regularly put money into this account and not touch it for anything other than a natural disaster. This will help ensure you’ll have your funds when you need them. The best savings accounts have higher interest rates than traditional savings accounts, so your money can grow automatically even if you’re not adding deposits.

Have cash on hand

Another U.S. government website, Ready.gov, advises keeping some cash at home, stored in a safe place. Because you should already have important documents like Social Security cards and copies of birth certificates safely stored away, you can add some money in your stash as well. It also wouldn’t hurt to include an emergency credit card with your important documents and emergency cash. Storing everything in a waterproof bag in your family safe or other secure location is probably the best idea.

You don’t know what can happen during a natural disaster, so it’s a good idea to have cash as a backup to your emergency credit card. If there’s no power and you need to make purchases, your card won’t work, but cash will.

Check your car insurance

Every car insurance provider is different and so is every car insurance policy. If you don’t know exactly what your car insurance covers, be sure to look at your policy. This can help you see whether you need extra coverage that would protect you financially for damage from natural disasters.

For example, does your car insurance cover a tree smashing your car during a severe thunderstorm? This, and other acts of nature/weather, are typically covered by comprehensive car insurance. This is an optional coverage you’d have to choose, so most policies won’t automatically have this included. However, the best car insurance policies include comprehensive coverage as an option, so you should easily be able to add it on if you need to.

As you evaluate your coverage, check to see what types of natural disasters are covered. If you find comprehensive insurance isn’t an option or certain natural disasters aren’t covered, you might consider looking into a new policy or changing your insurance company.

Check your home insurance

Do you know what kind of coverage you have with your home insurance? Are you covered if your house is flooded or a falling tree crashes into your garage? You may think you’d be covered in these situations, but it always pays to double check your policy. Otherwise, there could be a hefty bill when you have to pay for emergency home repairs.

Standard home insurance policies don’t cover floods or earthquakes, so you’d need separate policies to get these coverages. Also, certain areas may not qualify for these coverages, but that doesn’t mean these disasters couldn’t still happen. And if something were to happen, will your insurance help pay your relocation expenses during a disaster? Some policies will help pay for groceries, gas, and other expenses, but you’d have to look into your policy’s details to see exactly what’s included.

To learn more about your options, check out our list of the best home insurance companies.

Buy disability insurance

Disability insurance provides assistance if you can’t work because you get sick or injured. Without work you’d lose your income and wouldn’t be able to pay for necessary bills and expenses. With disability insurance, you can have the financial protection you need to get through difficult times.

It’s uncertain what could happen to you during a natural disaster, so illness or injury have to be included in the potential circumstances. With sufficient disability insurance, you can still receive part of your income if you can no longer work. Short-term disability policies typically last less than two years while long-term policies may last for multiple years or until you’re no longer disabled.

If you’re interested in disability insurance, consider how long the policies last, what they cost, and what kind of benefits you’ll receive. This will help you find a policy that best fits your needs.

Buy life insurance

Taking important steps toward financial emergency preparedness can involve thinking about some unpleasant things. How will your loved ones survive and thrive if you die? Will they have the finances they need to continue living comfortably and securely?

If you have people depending on you, a life insurance plan is a critical component of financially preparing for a natural disaster. Each company is different, but the best life insurance policies have coverage for accidental deaths, which typically includes deaths from natural disasters.

Remember, don’t assume your life insurance policy covers all types of natural disasters. Look over your policy details to see what would be covered and make adjustments if needed. 

Buy pet insurance

If you have pets, you can’t forget to include them in your emergency plans. Just like the human members of your family, your pets will need to be transported, fed, and housed. If they’re injured during a natural disaster, you’ll also need a plan to take care of them.

With pet insurance, your pet can be covered for common illnesses, accidents and injuries, procedures, and much more. This coverage can help you pay for emergency veterinary bills which may have otherwise strained you financially.

So although you gather items your pets may need during an emergency, such as food and water, look over your existing pet insurance policy or browse new ones to see the types of coverage they offer. Because pet care is often quite expensive, it pays to be prepared with a plan in place.

Emergency prep packing list

Once your financial preparation is complete, it’s time to make sure you have all the physical basics ready in case of an emergency situation. If you can’t afford some of these items, be sure to budget money each month so you can gradually purchase the items you need. Natural disasters don’t occur according to our plans, so it’s better to be safe than sorry.

Some of these items may have expiration dates, so regularly check your supplies and replace them when needed. Here are some of the basics you should have ready to go in case of an emergency:

• First-aid kit: Proper first-aid supplies, even if it’s a small kit, can help treat cuts and gashes and prevent infection.
• Nonperishable food: At least a three-day supply of nonperishable food for each family member can be enough to get by until the situation improves.
• Bottled drinking water: A three-day supply of drinking water is essential. A gallon per person per day is the recommended amount.
• Can opener: Canned food can last a long time, but it’s not the easiest to open without the right tool.
• Cell phone and chargers: Most people will already have a cell phone, but be sure to pack extra chargers in your emergency kit.
• Extra batteries: If you’re packing emergency equipment, you’ll likely need batteries to keep some of it running. Extra batteries are small and can come in handy for powering multiple devices.
• Hand sanitizer: Staying clean is important, especially if a natural disaster disrupts your daily life and/or your water supply. It may not be as easy to stay free of germs, but some hand sanitizer can help.
• Flashlight: If there’s no electricity, a flashlight with long-lasting batteries becomes a vital tool to have.
• Whistle: Whistles make loud, distinct noises that can be heard over long distances. This makes them perfect for calling for help and they’re very easy to pack.
• Local maps: You may know your local area pretty well, but things can look a little different if you don’t have access to a vehicle or highways. A local map can lead you to safety by pointing out specific landmarks and other points of interest.

This isn’t a comprehensive list, but you can use this as a reference for some of the essentials to pack in your emergency kit. Other potential items could include personal sanitation supplies like garbage bags and moist towelettes.

Be sure to cover the most important items first and then assess what else you think might be useful. For more ideas on what to include, check out the Ready.gov emergency supply list.

Emergency info checklist

Along with packing important items like water and food, it’s also essential to have lists of important information to help you navigate an emergency situation. These lists can be actual written lists or files saved onto your phone or other device. Or you can do both and be extra secure.

Remember, you may need to leave your home and find a different shelter or get hold of emergency services. If you haven’t prepared a list of where to go or whom to contact, an emergency situation could end up being a lot more difficult and dangerous than it needed to be.

Here’s a checklist of information you should have on hand in the event of a disaster:

• List of emergency shelters: If you have to leave your home quickly, it’s important to have a list of emergency shelters where you can go. Many shelters provide a place to stay, along with food, water, and other supplies. Check with your local officials to see what emergency shelters have been designated for your community.
• List of emergency contacts: Although each list of emergency contacts will likely be different, you may want to include phone numbers for local police and fire departments. Hospitals, specific doctors, and other contacts could be good inclusions as well, depending on your needs. Your phone may already have all the contacts for friends and family members, but it’s best to have a written list as well in case you can’t access your phone.
• Insurance company contact info: It’s never a bad idea to have all your insurance company contact info with you. Most insurance companies have their info online or on their mobile phone apps, but it wouldn’t hurt to have some hard copies as well.
• List of emergency radio stations or other communications resources: If you can’t access your normal methods of communication, a list of emergency radio stations or other communications resources can be life-saving. The NOAA weather station broadcasts official warnings, hazard information, forecasts, and more on a 24/7 basis.

Bottom line

To correctly understand how to prepare for a natural disaster, it’s best to learn about both aspects of disaster preparedness: the physical and the financial. Whether your location is prone to winter storms or other severe weather, or you’re worried about COVID-19 and the coronavirus pandemic, make sure you have both a physical plan and a financial plan.

Use this guide to help you put together your plans so you can be better prepared for the unexpected. Remember, each plan may vary depending on where you live and whom you live with. Customize your plans to suit your specific situation and update them whenever you need to. This way you won’t be caught unprepared.