Wildfires in California last summer, record numbers of tropical storms, freak blizzards and the Texas freeze-out in February 2021: It sure seems like there are a lot more natural disasters and emergencies than there used to be. And there are. According to NOAA, a record number of billion-dollar disasters struck the U.S. in 2020, reflecting a longer-term trend.
What should you do?
As financial planners we are always thinking about ways to be prepared for the unexpected. Perhaps it comes from my years in Boy Scouts, whose motto is “Be Prepared” but I’ve been thinking about this a lot more and you should, too.
I recently finished a book called “The Story of More: How we got to climate change and where to go from here”, by Hope Jahren. This is not a typical read for me. I usually prefer spy novels and other fiction. But lately I’ve been intrigued by the climate debate (not sure it is a debate anymore) and how our weather patterns have changed. Jahren spells out in chilling, stark terms where we, as a global society, are headed and it is not pretty. (Okay, you don’t have to read the book and get depressed about our futures but you need to pay attention to this blog.)
Why should I prepare for natural disasters?
Unfortunately, severe weather events are already affecting all of us even if you do not directly experience an event. Insurance companies know the score because their job is risk management. Take homeowner’s insurance for example. With more disasters damaging homes, insurers have been significantly raising premiums over the last few years to cover higher anticipated claims. Just look at your homeowner’s or renter’s insurance policy premiums. The increases are not 2-3% per year; they are a lot more.
What can you do to prepare for natural disasters?
Let’s start with your home. Water is your enemy. Severe rain storms and flooding are happening more often. So, you should take some steps to minimize damage and cost:
Take a look at your gutters, downspouts and chimney cap. Clear out the leaves each fall and make sure they direct water away from your foundation. If there are pooling areas during a rainstorm near your foundation, redirect the downspout or improve the drainage. You don’t want that water to end up in your basement. (Our basement has been bone dry for 20 years but a few years ago so much water came down the chimney and leaked through the cleanout door that we had a large puddle spread across our basement floor for the first time!)
Consider replacing your roof. If your roof is more than 20 years old, you are living on borrowed time, especially if it is exposed to direct sunlight which can degrade your shingles faster. An old roof is fragile and you don’t want to lose half your shingles in a wind or rain storm and then have water leak into your house, damaging your belongings.
Prune and/or remove trees that are close to your property. We have a couple of older trees on our property that are slowly dying. The maple out front is still beautiful every fall so we don’t want to take it down just yet. But it is a hazard. It has lots of dead branches as the tree is slowly shutting down and it is right next to our driveway where we park our nice cars. During those howling Northeasters I have visions of a big branch going right through the middle of my wife’s relatively new car. Need I say more?
Download your electric company’s app and/or write down their emergency contact numbers. In many parts of the country losing power can be a huge problem, especially in New England in the winter. Without power there is no heat because most systems need electricity to run the furnace or boiler to heat your home. In warmer climates that means no A/C. --Two things no one wants to be without.
You can take matters one step further by buying a means of back-up power. The lower cost route is a portable generator ($300-500). Or, you can spend $5,000 or more for a whole-house back-up generator. We’re in a unique situation because we have solar panels, which by themselves will not provide emergency power. However, paired with a whole-house back-up battery system, they can provide continuous power during an outage.
Because a back-up battery system can operate your solar panels during the outage, it can actually re-charge your battery during the outage (if you have sun, which is common after most storms). [I just signed up to have a Tesla Powerwall battery installed. Since the Texas power outage, nationwide demand has been high for such systems. This type of system is of particular interest to me because we have a forced-hot water oil-fired boiler. If we lose power, we lose heat.) If we are prudent during an outage, the battery should keep the heat and house running for 2-3 days.]
There are also a number of practical, low-cost things you can do to be ready for a natural disaster including making a Family Emergency Plan and Building an Emergency Kit. The Commonwealth of Massachusetts has excellent resources on these subjects and more at: https://www.mass.gov/be-prepared-for-emergencies You can also find a number of good Safety Tips for Specific Threats & Hazards at: https://www.mass.gov/safety-tips-for-specific-threats-hazards
In addition to your financial well-being, we are concerned about your safety during emergencies. Take a few steps now so that you can rest easy when “the big one” comes.
If you have more questions about the Tesla Powerwall I’m having installed, give me a call. I’d be glad to tell you about my experience and how I decided that was the right move for our family.
Lyman H. Jackson
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. FPS provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client after entering into an advisory relationship. Information herein includes opinions and forward-looking statements that may not come to pass. Information is derived from sources believed to be reliable. Information is at a point in time and subject to change without notice. Such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.