Dealing with home disasters: prevention and protection

Erik J. Martin
The Mortgage Reports contributor

In this article:

No one is exempt from home disasters — natural and otherwise. Here is how to protect yourself and deal with the aftermath.

  • Prepare for disasters in advance — no one is exempt. This means checking your insurance coverage and doing what you can to minimize potential damage
  • Depending on the most common catastrophes in your area, have an escape route, stock up supplies, and consider potential medical needs
  • Deal with the aftermath — alternative housing, making insurance claims, and recovering psychologically

While we don’t enjoy thinking about potential emergencies, advance planning can reduce the effects on your health and finances.

Verify your new rate (Sep 20th, 2021)

Why prepping for home disasters early is essential

A great source of pride comes with owning a home of your own. But it also comes with great responsibility. One of your duties is to ensure that your property and its residents are protected.

From hurricanes to floods to fires, Mother Nature, accidents, and bad actors all pose a threat to your home. That’s why taking steps now to safeguard your property from these and other home disasters are important.

Disaster expert/author Sean Scott says prepping now can prevent catastrophic losses.

“Natural disasters like the recent hurricanes underscore the importance of being prepared to survive a disaster. You may think you live in an area that’s less prone to large-scale disasters,” says Scott. “But you shouldn’t neglect preparing for even a small-scale event that can have the same effect on your life.”

Brad Kieserman, vice president of disaster operations/logistics for the American Red Cross, agrees.

“Emergencies can happen at any time and in any place. Therefore, we believe every family should create a disaster plan to be prepared and keep safe in times of emergency,” says Kieserman.

Step 1: Review and improve your standard insurance policy

Homeowners insurance can provide coverage to reimburse you if you suffer losses caused by many home disasters. But it’s crucial to ensure that you have proper coverage limits in place. FEMA reports that over half of all American homeowners lack adequate homeowners insurance to replace their home and its contents if a disaster loss happens.

Related: What does homeowners insurance cover, and why does your lender require it?

Your standard homeowner’s policy should at least cover the cost to rebuild your home. But note that the amount you paid for your home may not match the rebuild cost. That’s why you should choose a policy with guaranteed replacement cost over actual cash value.

The former reimburse you for the actual cost of the damaged property if you were to replace it brand new. The latter is equal to the replacement cost minus any depreciation based on age, wear and tear.

Talk with your insurance agent and check that your property has enough structural coverage. In addition, the Insurance Information Institute recommends considering rebuild cost factors like:

  • Your square footage
  • Number of bedrooms, bathrooms and other spaces
  • Architectural style (for instance, split-level or ranch)
  • Prized features like a fireplace or home theater
  • Area construction costs
  • Exterior materials (brick/stone, veneer, or frame)
  • Roofing type/materials
  • Garages, sheds and other structures
  • Home upgrades you’ve made since your purchase

Step 2: Get extra coverage

Per the Insurance Information Institute, standard homeowners policies provide coverage for home disasters like damage caused by lightning, hail, fire and explosions. But if you live in an area at risk of earthquake or flood, you’ll need extra coverage for those threats. That’s why it’s smart to ask your insurance agent about your risks and the costs to add flood or earthquake coverage.

“Also, be sure your insurance policy covers you against wind damage,” says Vince Lefton, CEO of Bulldog Adjusters. “We learned hard lessons from Hurricane Harvey last year and Hurricane Florence this year. One is that if you don’t have proper coverage, your insurance company isn’t going to cover you. And FEMA doesn’t pay out for full damage costs, either.”

Flood insurance is available through the National Flood Insurance Program in participating areas. Also, a separate earthquake policy can be bought from a private insurance company or possibly a state-backed plan.

Step 3: Document your digs

Furthermore, it’s smart to maintain a detailed inventory of your home’s contents. This comes in handy if, for instance, your possessions are burned in a fire or swept away in a tornado. An inventory can prove the value of what you owned. Plus, it could speed up your claim processing.

To properly document your stuff, take photos and/or videos. Also, write down descriptions, including year, make and model. Get and keep a written appraisal on valuable items. Furthermore, keep these important records in a water- and fireproof box, safe, or safe deposit box. Give copies to trusted friends or family. Keep digital copies backed up in cloud storage, too.

For more tips, read the Consumer Financial Protection Bureau’s checklist.

Step 4: Make a plan

Creating an emergency plan now can prepare you and your family to respond safely to a disaster. To help, the Department of Homeland Security recommends the following:

Step 5: Stock up on supplies

To survive home disasters, you may need to shelter safely in place. That’s why the American Red Cross suggests stocking up on the following:

  • 14-day supply of bottled water (1 gallon/person per day)
  • 14-day supply of non-perishable, easy-to-prepare foods
  • First-aid kit
  • Battery-powered or hand-crank NOAA weather radio
  • Flashlights with extra batteries
  • Copies of personal documents: medication/medical information, proof of address, deed/lease to home, passports, birth certificates, insurance policies, family and emergency contact info
  • One-week supply of medications and medical items
  • Cell phone with chargers
  • Paper maps of the area
  • Pocket cash

Step 6: Know what to expect in the recovery phase

After a disaster hits, the recovery period can take days to months. Kieserman offers the following tips:

  • Know how to contact and reunite with your household members.
  • Listen to radio and TV stations for the latest info and updates.
  • If you evacuated, don’t go back home until it’s been deemed safe. Beware of road hazards, fallen power lines, broken gas lines and other damage.
  • Contact your insurance agent to file any loss claims.

Don’t think that the awful events on the news all the time can’t happen to you and yours. For instance, FEMA data shows that about 1/4th of claims filed came from people living in so-called “low-risk” areas. “We all live in a flood zone,” says the agency.

It pays to prepare.

Verify your new rate (Sep 20th, 2021)