Prepare Your Finances for a Natural Disaster

Natural disasters—from hurricanes, tornadoes, and wildfires to earthquakes and floods—are impacting more and more Americans with increased frequency and intensity. If it happens to you, it can feel emotionally and financially overwhelming. However, there are ways you can help prepare your finances to face emergencies.

I sat down with Asheville, North Carolina-based Schwab Senior Financial Planner Dan Stanush, who holds the CERTIFIED FINANCIAL PLANNER® designation, to talk about his experience in Hurricane Helene. This hurricane hit his hometown in September 2024. As a newcomer to the area, he wasn't prepared for the hurricane. We wanted to use his first-hand experience in his own voice to help give you ideas on how you can create a plan to face the unexpected.

Cindy: Tell me about your experience in Hurricane Helene.

Dan: I moved to Asheville from Colorado in April 2024, so I'd only been there five months. I'd never experienced a hurricane and didn't know what to expect. The locals didn't seem to expect much damage. So, I didn't do anything to prepare. Next thing I knew, a 100-foot oak tree in my front yard came down on my neighbor's car, taking out a power line. We lost power for three weeks. As the rivers rose, it impacted the water system, and we were without water for six weeks.

Cindy: No power and no water. What did you do?

Dan: I had food in the fridge and some drinking water on hand, but that wasn't going to last long. I had a battery-operated radio to listen for updates on where I could pick up supplies for me and my dog, Cheyenne.

A few days before the storm, I had exchanged numbers with a woman I had met online. She reached out to see if I was okay, and we went for a walk. She had power and invited me to stay with her. From our first date, my dog, Cheyenne, and I ended up staying with her for two weeks until my power was restored. I'm proud to say we're still dating now.

Cindy: What a nice silver lining from a difficult time! What are some ways people can prepare financially for a situation like this?

Dan: Let's start with practical things. Make sure your vehicle has a full tank of gas. Second, have cash on hand. Maybe $200-$500 in smaller bills, enough to cover short-term expenses like food, shelter, gas, and prescriptions. Cash is important because ATMs could go down. The gas station and grocery store only accepted cash or checks—they couldn't accept credit cards since the power was out. 

Cindy: Are there other steps we can take?

Dan:  Here are several ideas that you could do now.

• Get important documents together. This could include identification papers such as your driver's license, passport, Social Security, Medicare and health insurance cards, birth and marriage certificates, and military papers. If you apply for disaster assistance, you may need to show proof of ID or income. I used a utility bill that I accessed from my phone to help me quickly get help from FEMA.
• Take inventory of your home and possessions. I didn't lose my home, but a lot of people did. If you do, having a record of what you own is important. Take photographs or video every room in your home, even your closets and cupboards. The more accurately you can document your possessions, the easier it will be if you have to make an insurance claim.
• Store everything in a safe place. Keep hard copies in a fireproof and waterproof safe or a bank safe deposit box. You can also store your documents, photos, and videos electronically in the cloud or on an external hard drive. Maybe do both. Also consider leaving copies with a trusted family member or friend.

Cindy: Let's talk about insurance.

Dan: Make sure you have the right kind of insurance coverage and the right amount. What we're talking about here is property and casualty insurance, which are commonly bundled together. Property insurance protects your physical things. Casualty insurance can protect you from legal liability if you're held responsible for injuries or damage caused to others, like my oak tree that fell on my neighbor's car.

Review your homeowners insurance, or renters insurance, depending on your housing. Is everything up to date? Consider your climate risk. Maybe you need additional flood, fire, or earthquake insurance. These are often excluded from homeowners policies. And don't forget your auto insurance.

Talk to your insurance agent about the amount of coverage, premiums, and deductibles. The premium is what you pay to keep your insurance active. A deductible is what you'll pay out of pocket before insurance kicks in. Sometimes a higher deductible with a lower premium makes sense. Sometimes the reverse.

It's good to review these policies annually and especially if you have a major life event, like a marriage or new baby. One other thought: Keep the insurance company contact numbers and policy numbers in your phone so you can call right away if something happens.

Cindy: Did you hear about any scammers?

Dan: I did hear about scammers on online forums. These were people posing as contractors or insurance representatives. The tip-off was that they were asking for money upfront. No genuine help organization will ask for payment in advance, so be wary of anyone asking you to send money. Don't give out your financial information to unverified individuals. As an extra precaution, set up security alerts on your banking and investment accounts, as well as advanced authentication where possible. You can also set up a credit freeze or fraud alert with the three main credit agencies.

Cindy: Where can people find disaster relief assistance if they need it?

Dan: I found FEMA to be very helpful. There's a lot of information at fema.gov, including an Emergency Financial First Aid Kit. Ready.gov and the American Red Cross also have helpful resources.

Cindy: Any last thoughts?

Dan: It's important to know your climate risk. Understand that these things do happen. Think about it especially when choosing where you want to live. I always thought it would be nice to live by a river, but now I see it can flood. Take care of the bigger picture financially, but also make smaller preparations like having a to-go kit ready. And my bike certainly came in handy as a way to get around when the roads were closed.

Talking to Dan about his experiences in Hurricane Helene reinforces to me the importance of creating a plan—both financial and personal. Whether you're concerned about a possible hurricane, tornado, fire, or flood, make a plan. Make sure your personal and financial documents are in order and easily accessible. Update your insurance coverage. Call a family meeting and create a communication plan. Collect supplies you may need, including cash on hand.

Dan didn't know a major hurricane was coming. None of us know when a major disaster could strike. Planning ahead for both your physical and financial safety could be key to surviving whatever comes along. And as Dan told me, he's much better prepared now for whatever could lie ahead.