Katrina to get their lives back in order. Some people think that because they have insurance that they won’ t need access to their investments in these situations, but that’ s not true.It could take weeks or months before claims are filed and settled. For events like Katrina, it is likely that insurance companies will argue over whether the damage was caused by a wind event (which is covered) or a flood event (which is not, unless you had expensive flood insurance). Some claims will end up in arbitration and/or court.It is the same for transportation.
What are these people going to do for shelter and transportation in the meantime?That’ s why access to your investments is so important. It is also one of the reasons why I have been so vocal against investments like annuities that force the investor to pay substantial surrender penalties to get their money. Don’ t allow yourself to be in a situation where you will lose tens of thousands of dollars in needless penalties on top of your disaster losses.For those ravaged by Katrina, access to their investments will allow them to pay for transportation and temporary housing.
Even if some of these expenses will eventually be reimbursed by insurance, access to these funds allows them to quickly improve their situation.For those who are retired, it is very difficult to recover financially from disaster-related lossesespecially if only some of the loss was covered by insurance. Sure, you can deduct these losses on your taxes but that is little consolation. People in this situation will have little choice but to reduce their standard of living.
Responses to 'Prepare Financially For When Disaster Strikes'