As if the COVID-19 pandemic weren’t enough to worry about, 61% of Americans in a recent survey said they were likely to be personally affected by a natural disaster in the next three to five years, with 19% saying this was highly likely, the American Institute of CPAs reported Wednesday.
However, only 15% of respondents said they had created a disaster plan to protect their finances. Worse, 27% had not taken any steps at all to prepare for a natural disaster.
Concern about natural disasters is not unwarranted. Last year marked the fifth consecutive year that 10 or more weather and climate disasters with at least $1 billion of associated losses occurred in the U.S.
“In the face of a natural disaster, protecting your family from harm should be your primary concern,” Gregory Anton, chair of the AICPA’s National CPA Financial Literacy Commission, said in a statement.
“During the recovery process, access to financial resources and personal information is critically important. Taking action to put together a plan today will help protect your family and your finances should you ever find yourself impacted by a natural disaster.”
The Harris Poll conducted the online survey within the U.S. between in early November among 2,050 adults.
Thirty-seven percent of survey participants admitted that they did not have a good sense of how much recovering from a natural disaster would cost their family financially.
Seven in 10 said such an event would have a major or moderate effect on their financial situation, including one in three who said there would be a major impact.
“It is a good idea to run through the calculations for potential damage, finding temporary housing and other recovery costs, so you can check to see if you would have enough cash on hand to cover it,” Anton said.
“Review your insurance to be sure you have the right amount of coverage and that you’re not overpaying. Make sure you know what is covered and don’t be afraid to comparison shop periodically to see if switching makes sense.”