The biggest mistake we can make when it comes to preparing for a hurricane or hurricane season is not being ready financially.
We’ve been through hurricanes Matthew and Irma, but the reality of it is, chances are you have never been in a true hurricane. Hurricane Dora in 1964 was the last true direct hit on the First Coast. A storm surge came in and flooded out homes. Roofs were ripped off. There was widespread damage. (By the way, Dora was just a category 2 storm.)
So how are you going to survive a financial storm?
When it comes to financial survival, insurance is so important. The two big ones are homeowners insurance, which is up-to-date to the current cost of your home, and flood insurance to go with it. (This is where knowing your zone is so important.)
RELATED: Know your flood/evacuation zone
So I highly recommend that you get an insurance agent. Make sure they’re well versed in homeowners, renters or business insurance -- whatever your needs might be. They’ll be up to speed on any law changes and which carriers are most likely to still be standing in the wake of a major catastrophe. I can’t stress that part enough: You need to be confident your insurer will pay out in the event of a disaster. In other words, I’m recommending that you prioritize the insurance carrier’s ability to pay up (and promptly) over the cost of your policy.
A good agent will also help set you up with your second policy by directing you to the National Flood Insurance program. That means for many businesses and homeowners, you’ll need at least two types of insurance and they need to account for the rising costs of housing.
There’s also a third type of insurance you might want to ask about, and it’s not covered by flood insurance or a typical homeowners policy. It’s called “sewer backup insurance,” and you can probably guess why it would come in handy here in Florida.
Worst-case scenario, consider the following:
- Assuming you can keep your job, with homeowners insurance, you are looking at a minimum of $15,000 in out-of-pocket losses from expenses related to the loss of your home;
- Yes, there will be federal (and state) programs to help you recover from your losses, but these will most likely be more loans, meaning they will have to be paid back;
- It takes 30 days for insurance policy changes to take effect, so do not wait;
- Get insured and have it reviewed, double-checking for inflation and flood variances;
- And get a rainy day fund going.