Few Americans Financially Prepared for a Natural Disaster
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<div class="body gsd-paywall"><div>Recent data found that while many Americans have taken at least one step towards being prepared, there are still more actions that can be taken in the short term to help protect their finances and their families should disaster strike.</div> <div> <p>Six in ten Americans (61 percent) believe they are likely to be personally impacted by a natural disaster in the next three to five years, including one in five (19 percent) saying they are very likely to be personally impacted. That’s according to an American Institute of CPAs (AICPA) survey of 2,050 U.S. adults conducted by The Harris Poll in the fall of 2019. Natural disasters like hurricanes, floods, tornadoes, earthquakes and wildfires happen every year. In fact, 2019 marked the <a href="https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fcoast.noaa.gov%2Fstates%2Ffast-facts%2Fweather-disasters.html&esheet=52224539&newsitemid=20200527005084&lan=en-US&anchor=fifth+consecutive+year&index=1&md5=5dbf2118bc61ce06337ece68bb0c9fb6" rel="nofollow" shape="rect" target="_blank">fifth consecutive year</a> that ten or more weather and climate disasters with at least a billion-dollars of associated losses affected the United States.</p> <p>“In the face of a natural disaster, protecting your family from harm should be your primary concern,” said Gregory J. Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission. “During the recovery process, access to financial resources and personal information is critically important. Taking action to put together a plan today will help protect your family and your finances should you ever find yourself impacted by a natural disaster.”</p> <p><strong>Understanding Financial Impacts of Natural Disasters</strong></p> <p>Nearly four in ten Americans (37 percent) admit they do not have a good sense of how much recovering from a natural disaster would cost their family financially. And seven in ten (71 percent) say that such an event would have a major or moderate impact on their financial situation, including a third (33 percent) who said there would be a major impact.</p> <p>“It is a good idea to run through the calculations for potential damage, finding temporary housing and other recovery costs, so you can check to see if you would have enough cash on hand to cover it,” added Anton. “Review your insurance to be sure you have the right amount of coverage and that you're not overpaying. Make sure you know what is covered and don’t be afraid to comparison shop periodically to see if switching makes sense.”</p> <p><strong>Emergency Preparedness</strong></p> <p>The good news is nearly three-quarters of Americans (73 percent) have taken at least one step to prepare for a natural disaster, most commonly assembling a disaster supplies kit (34 percent), creating an evacuation plan (32 percent), or backing up and storing personal medical and financial records in a safe place (31 percent). The bad news is only 15 percent have created a disaster plan to protect their finances. And concerningly, a little more than a quarter of Americans (27 percent) have not taken any steps at all to prepare for a natural disaster.</p> <table cellspacing="0" id="table-0"> <tbody> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="4" rowspan="1"> <p><strong>Steps Americans Have Taken to Prepare for Natural Disaster</strong></p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>34%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Assembled a disaster supplies kit (first-aid kit, food, water, tools, etc.)</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>32%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Created an evacuation plan</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>31%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Backed up & stored personal, medical & financial records in a safe, accessible place</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>27%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Evaluated insurance needs to assure adequate coverage</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>26%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Taken an inventory of assets & possessions for insurance purposes</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>24%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Contributed to an emergency saving account</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>19%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Created or updated an estate plan and/or will</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>19%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Purchased additional insurance (e.g., flood insurance, hurricane insurance, etc.)</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>15%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Created a disaster plan to protect finances</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>2%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>Other</p> </td> </tr> <tr> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>27%</p> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> </td> <td colspan="1" rowspan="1"> <p>I have not taken any steps to prepare for a natural disaster</p> </td> </tr> </tbody> </table> <div style="clear:both;"> </div> AICPA recommend a few areas where Americans may want to get a head start. <p><strong><em>Banking Without the Bank</em> -- </strong>Investigate alternative locations to use anATM card to obtain cash without additional fees, and perhaps mobile banking which can allow most banking activities including check deposits and transfers between accounts.</p> <p><strong><em>Insurance Coverage</em> -- </strong>Ensure homeowner’s or renters insurance is up to date for changes in value, valuable items and special risks like flooding.</p> <p><strong><em>Safe Deposit Box</em> -- </strong>Ensure cpmplete access to a safe deposit box.</p> <p><strong><em>Wills, Powers of Attorney, and Health Care Proxies</em> -- </strong>Ensure legal paperwork is up to date.</p> <p><strong><em>Employment-Based Programs</em> -- </strong>Consider disability coverage or ability to borrow from a 401(k) or similar retirement plan.</p> </div> </div>
