Few Americans Financially Prepared for a Natural Disaster: Survey

Pollsters found good news in the fact that 73% of Americans had taken at least one step to prepare for a natural disaster. These were the actions they reported taking:

• 34% assembled a disaster supplies kit
• 32% created an evacuation plan
• 31% backed up and stored personal, medical and financial records in a safe, accessible place
• 27% evaluated insurance needs to ensure adequate coverage

• 26% took an inventory of assets and possessions for insurance purposes
• 24% contributed to an emergency saving account
• 19% created or updated an estate plan and/or will
• 19% purchased additional insurance
• 15% created a disaster plan to protect finances

The outliers were those who had taken no action to prepare for a natural disaster.

“If you haven’t filed your taxes yet this year, you have the opportunity to cross two ‘to-dos’ off your list at the same time,” Neal Stern, member AICPA’s National CPA Financial Literacy Commission, said in the statement.

“After filing, take it a step further and organize your important documents and put them in a safe place. Even if you never experience a disaster, the peace of mind gained from organizing your records is well worth the few hours spent on this important task.”

COVID-19 and Disaster Planning

Many Americans’ lives have been disrupted by the coronavirus pandemic, complicating the process of preparing a plan to protect their finances from the next natural disaster. Add to that, government and institutional responses may be slower than usual to respond at present.

The AICPA suggested several areas in which American could get a head start.

Banking without the bank. If faced with a closed bank branch because of the pandemic, investigate alternative ATM locations that do not charge additional fees for using a card to obtain cash. In addition, mobile banking can allow most banking activities, including check deposits and transfers between accounts.

Insurance coverage. Review coverage with an insurance agent to ensure homeowner’s or renter’s insurance is up to date for changes in value, valuable items that have been added like jewelry or watches, and special risks like flooding. As a first step, know how to contact the agent, who may be working remotely or with a reduced staff under current conditions.

Safe deposit box. For documents in a safe deposit box that may be needed after a disaster, check with the bank’s main office to find out how to access the box if the local branch holding it is closed or operating under restrictions.

Wills, powers of attorney and health care proxies. Legal paperwork should be up to date in the event a disaster results in incapacity, death of a loved one or serious injury. If papers need an update, it pays to contact the attorney or other professionals ahead of time as they may be working remotely under pandemic-related conditions.

Employment-based programs. An employer’s HR department may be closed because of the pandemic and so unable to help manage an employee’s financial survival in a disaster. It is wise to learn now how to get needed information — disability coverage or ability to borrow from a 401(k) or similar retirement plan — and request any needed updates by phone or online.