Protect yourself from the financial impacts of a natural disaster

Understand the risks

Being informed about the disasters you may encounter can help you be prepared to deal with the risks. Contact your local council to find out about flood mapping, historical flood records, and the Bushfire Attack Level of your home. Check if your house meets natural disaster standards.
Be aware of any brewing storms, hail, cyclones.

Be prepared

Ahead of storm season clear gutters, check your roof for gaps, rust, or discolouration, and trim back trees and branches overhanging your property. An insurer may refuse your claim if your property isn’t well maintained.

If a storm is heading your way secure loose items such as outdoor furniture and get your car undercover.

Ensure the originals of any important documents – birth and marriage certificates, wills and powers of attorney and passports – are stored securely in a fire resistant, waterproof safe at home or in a safe deposit box. Keep electronic copies of important documents too.

Work out an emergency plan ahead of time.

Check your insurance policies

Underinsurance can be a major problem after a natural disaster.
Sometimes people deliberately underestimate their building or contents cover to lower their premium. Or if they’ve renovated or landscaped their garden and just kept renewing their policy annually it may not reflect the increased value.

Underinsurance can also be a product of the calculator you used to help you come up with the sum insured. The best calculators pose lots of questions such as whether the house is built on a slope; the quality of the fixtures and fittings; the age of the home.
Even if you insure for the market value of your home it might not be enough to finance a rebuild. Costs can increase after a natural disaster because of the need to meet current building codes and higher demand for tradespeople and building supplies.

It’s important to check what is covered in the event of a claim. Some costs can be easy to overlook including temporary housing expenses; the cost of demolition and debris removal; drawing up and lodging plans with your local council.

Some insurers offer a safety net on policies, adding up to 30 per cent to your sum insured in the event of a total loss.

Stay alert in the aftermath

Sometimes it’s the actions people take in the aftermath of a natural disaster that compound their financial difficulties.  For instance, their insurer may need to authorise repairs and tradespeople before any action is taken. Or the homeowner may pay for the cost of cleaning up when there is free help covered by the government.

Accepting a cash settlement from their insurer can leave them out of pocket. So be aware that anyone who settles their claim within a month of an event has up to a year to get it reassessed.

Fake tradespeople or scammers can come door-knocking and pressure them into paying cash upfront by offering to do repairs more quickly or cheaply.

A little preparation and planning will go a long way to help you avoid the financial fallout of natural disasters.