Natural Disasters: Preparation and Recovery - Adviser Investments

Natural Disasters: Preparation and Recovery

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As financial planners, we spend a lot of time thinking about worst-case scenarios—even ones that are impossible to predict, like natural disasters. Today, we look at preemptive measures and ways to shore up support to minimize your headaches during recovery.

  1. Keep on top of your coverage. If you haven’t updated your homeowner’s policy since completing a major renovation, it’s time to call your broker to make sure your cost of rebuilding is covered in today’s dollars. Your policy may have been suitable when you first moved in, but the rising costs of materials and labor may mean your payout level is insufficient today.
  2. Start the claim process right away. Always file an initial claim with your insurance company as soon as you can after a disaster, even if the claim is incomplete—you want to secure your place in the queue, especially if the event impacted many of your neighbors. Report big-ticket items first to open the claim and add to your file as you continue to document lost items. Depending on the language in your policy, filing fast may qualify you for an immediate payout to help with living expenses.
  3. Navigate mortgage snags and property-assessment issues. Depending on the severity of the damage or loss, talk to your lender about a temporary break on your mortgage—they may work with you to waive payments for a limited time. The insurance proceeds should help pay off your mortgage if you decide not to rebuild. And check with your town to see if your property taxes will decrease, assuming you believe the damages may lower the resale value of your home.
  4. Get ahead of tax considerations. The IRS may extend certain tax deadlines for affected taxpayers if the losses are grave enough. And in some cases, you can take a casualty deduction: Individuals and businesses that suffer uninsured or unreimbursed disaster-related losses can claim them on their tax return. Net casualty loss doesn’t need to exceed 10% of adjusted gross income and taxpayers needn’t itemize in order to qualify.
  5. Revamp your financial plan. If you find that you are underinsured in the wake of a disaster, we can help you by reviewing your financial plan to examine the effects and suggest next steps. We would also be happy to discuss your homeowner’s insurance policy to make sure it meets your needs.

Every natural disaster presents unique challenges. If you’d like to discuss how to best situate yourself in advance, don’t hesitate to give us a call. And if you’re impacted by such an event, call us as soon as possible. We’re here for you.

Are there any topics you’d like us to address in a future FPF section? Please contact your team or write to us at We’d love to hear your suggestions.

This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.

Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.

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