In 2017, we have seen disastrous wildfires in Northern California, record-setting hurricanes in Texas, Florida and the Caribbean and a mammoth earthquake in Mexico City. Tens of thousands have fled their homes, unsure when they will be able to return — or what they will find when they get back.
Along with loss of life and emotional havoc, natural disasters can cause devastating financial loss. Consider the cost of an unplanned evacuation, restocking a refrigerator and freezer after a week without power or rebuilding a home after a flood or fire.
Government officials and rescue personnel can tell you how to prepare physically — when to board up your windows and when to evacuate — but there is less information available on how to prepare yourself financially.
Here are five areas to consider:
Examine your insurance policies
Many people assume that their homeowners' insurance will cover damage to their homes caused by a natural disaster — but that's not necessarily true. For instance, standard homeowners' insurance does not cover earthquake damage or flood damage. If you live in an earthquake-prone area, you may need to purchase an additional earthquake policy or rider in order to be covered.
Flood insurance is available if your property is located in a community that participates in the National Flood Insurance Program. You can check if your community participates by referring to FEMA's Community Status Book.
“You really need to know what your insurance policy covers," said Dean Russell, managing director of financial advisors at Symphonic Financial Advisors in Kansas City, a City National Bank company.
“I've had my roof replaced twice because of hail damage. And roofs depreciate as time goes on, so the insurance policy may not cover as much now as it did several years ago. It's important to talk to your agent and understand what coverage you have and how it works," he said.
Boost your emergency savings
When a disaster hits and evacuation is necessary, you could be out of your home — or your job or business — for a long period of time. That's why financial advisors recommend maintaining an emergency fund of at least three to six months' worth of living expenses.
“If you can maintain up to a year of expenses, that's even better. It will take some time for any insurance payments to come through," Russell said. “These funds should be kept in a savings, money market or similar account where there is no risk of volatility reducing the total you have saved."
You may also want to consider establishing a line of credit now, before you need it, knowing it will be there when you do, suggested Dean Deutz, a private wealth consultant at RBC Wealth Management-U.S. in Minneapolis.
With a line of credit, you not only have access to money right away for short-term cash needs such as housing, food and medical needs, but the ability to pay for damage repairs to a home or business, Deutz said. Insurance companies may take weeks or even months to pay for such repairs.
"A line of credit can offer tremendous flexibility and peace of mind," Deutz said.
Corral valuable documents
If your home is damaged by a natural disaster, you'll need access to various important documents like insurance policies, passports, credit card numbers and bank account numbers.
Van Pate, wealth strategies consultant at RBC Wealth Management-U.S., recommends scanning these important documents and saving them online in the cloud as well as sending copies via email to a relative who lives in a different part of the world.
Russell, of Symphonic Financial Advisors, tells clients that if they feel safer with hard copies, they should keep them in a bank safe deposit box or a fireproof and waterproof safe at home - not in a file cabinet or desk drawer.
Along with paper documents, include videos of your belongings so you'll be able to report specific losses or damages to your insurance company after a disaster, recommended Deutz.
“When you video your belongings, try to zoom in on serial numbers and brand names," Deutz said. “Even go through your closet slowly so you'll have a full video record."
Cash on hand
Consider keeping a relatively small amount of cash in a secure place at home, such as a safe. Or at least withdraw cash in advance if you know that a disaster like a hurricane or blizzard is forecast.
“In some cases, whole communities may lose power, such as in Puerto Rico after Hurricane Maria. If they can't get their hands on cash, people just have to barter and help each other," Pate said. “It may be a good idea to keep a few hundred to $1,000 in cash in case of an emergency."
Prepare for damage
Do you know how to turn off your home's access to gas, electricity and water? If not, make sure you learn now - before a disaster ever hits.
“In some cases, leaving utilities turned on can make property damage worse," Deutz said. “And if you've evacuated and the pipes burst, and the water keeps running, that could turn into another economic problem."
If you do sustain property damage from a natural disaster, contact your insurance agent as soon as possible. In the case of widespread damage, it may take some time for an insurance claims adjuster to get to your home. In the meantime, take photos or videos of any damage, make written notes cataloging the damage so you won't forget any details when the adjuster arrives.
You may need short-term financial assistance while you wait for insurance claims to be settled and payouts to arrive. In the U.S., FEMA offers financial assistance for victims of natural disasters, as well as interim housing for those whose homes are uninhabitable.
If you find you need to take advantage of help from FEMA, apply online for assistance as soon as possible. After a major disaster, requests for grants and housing can take several weeks to be processed.
This article originally appeared on CNB.com. City National Bank is an RBC company.
RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.