Are you financially prepared for a natural disaster?

blog img
May 27, 2024

Natural disasters are unavoidable, but one can be prepared to handle these and recover financially. ET Wealth lists how to do so by putting together an emergency financial kit.

The 3-step programme

Here are the three essential steps you need to take at the following junctures to overcome a disaster and get back financially on your feet.


  • Build an emergency corpus that will help you cover your family’s needs for at least six months. Keep a bit extra for repair or renovation work, or hidden costs like hotel stay and rental car.
  • Review insurance policies across all areas. Check that you have the right type of cover and adequate coverage.
  • Secure important documents online as well as in a fi reproof, waterproof safe. Make an inventory of precious belongings. Take photographs or record a video of your car, the rooms in your home and any valuables.


  • Tap into your stash of emergency cash as well as investments that you can access for immediate needs, such as liquid funds.
  • Inform your bank to stop any auto debit payments that are not essential. Ask for a moratorium in case of loans or outstanding credit card bills to avoid late payment charges.
  • Check with your local authority or community about aid, shelter or provisions being provided to cover daily needs. Share address of alternate accommodation and numbers with office, school authorities, banks, etc.


  • Contact your insurers and provide all documents needed, such as a list of property damage, to file your claim. Check for other eligible covers like warranty on products and insurance offers on credit cards.
  • Priorities your spending and cut down costs. Find out if you’re eligible for any tax breaks or compensation. Start rebuilding your emergency corpus.
  • Be wary of scamsters offering you instant loans, quick submission of claims or any other disaster relief. Do not sign any documents without verifying them thoroughly.

Before a disaster strikes
A) Safeguard critical documents

Store important documents and their copies in a locker or safe, an external drive and even on the cloud, if possible. The last option will make it easy to access these during or after a disaster. Here’s a checklist that you can fill up for your documents and share with the family:

B) Check your insurance coverage
Insurance is an important part of financial emergency preparedness as it covers you in case anything bad happens. While almost everyone has health, auto and life insurance, here are two more you can consider.

Flood, fire, cyclone, earthquake and man-made disasters: Check that your home insurance policy covers all these. If your area is prone to a certain type of disaster, such as earthquakes, see if you can add more coverage under such categories.

Renters’ insurance: If you’re a tenant, the house you live in may be covered by your landlord, but your belongings won’t be. So, consider getting a tenant insurance that offers coverage against fire, theft and burglary, electrical breakdowns, manmade hazards, and natural calamities. Some plans will also cover expenses for an alternate accommodation while the damaged house is being repaired or you shift to another apartment.

Insurance checklist
As insurance is one of the most important elements that will help you recover financially, fill up this card with your details and share it with everyone in the family.

Beware of scams after a disaster
A disaster often leads to scamsters coming out of the woodwork. To avoid being conned, always ask lots of questions and documentary proofs. Watch out for:

  • People who ask you to pay up-front fees to help you get benefits or instant loans.
  • Con artists posing as government employees, insurance adjusters, law enforcement officials, or bank employees, especially if they ask for payment or financial information.
  • Suspicious charities offering you financial help if you share personal documents and make a small donation to get a bigger aid.
  • Anyone sharing a ‘limited time’ offer and pressuring you to take it immediately as it could be something you take in haste and regret later.
  • Insurance agents who try to sell you policies after the disaster, promising that you will still be able to file a claim and get reimbursement.

Never sign anything if the other person isn’t giving you time to review it. Ask a trusted friend, relative or lawyer before taking a decision.

By Namrata Dadwal ( Economics Times )