When Disaster Strikes: Understanding Home Insurance and Protecting Vital Documents

What happens when disaster strikes and your insurance policy doesn’t measure up? Stacey Hyde unravels the complexities of home and renter’s insurance amidst the dramatic rise in natural disasters. Sharing personal experiences from the Memphis area’s earthquake risks, Stacey highlights how crucial it is to scrutinize your policy, comprehend your deductibles, and prepare financially for unforeseen calamities. Discover why not all losses are created equal and how some might still be covered even without explicit earthquake insurance.

Beyond the fine print, safeguard your vital documents before a disaster catches you off guard. Stacey offers practical advice on keeping your essential paperwork, like passports and birth certificates, accessible and protected, whether through fireproof storage or secure digital backups. With frequent reminders of nature’s unpredictability, this episode empowers you to reassess your insurance needs, fortifying your peace of mind and readiness for whatever comes your way.

Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis, TN 38137. (901) 422-7526. This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Transcript

Speaker 1: 0:00

Hi, I'm Stacey Hyde and I'm back with another episode of Better Financial Health in 15 Minutes or Less, and today I would like to talk about home insurance and natural disasters, renter insurance and really kind of how these wildfires in California have kind of caused a lot of people to think about something that they probably hadn't thought about much, and that's their home insurance, if they own their home, or their renter's insurance, if they're renting, and really wonder what does it cover and what are the limits to it. And I think that's something very important to look at. While we're in the Memphis area and we don't really have a lot of wildfire risk, we do sit on the New Madrid Fault, which puts us at an elevated risk for earthquakes, and, similar to Californians who can no longer find wildfire coverage, we actually struggled to get earthquake coverage here. I know that personally. We used to have it, and then we had a supplemental policy for it. However, it started to get really, really expensive and it led me to belatedly really dive into the policy to see what it would cover. And when I really took a deep dive into the policy, it really wasn't going to cover all that much relative to the loss that we might suffer, and so we made the decision to self-insure our earthquake risk. And when I talk to our clients, I find that many of them have either just inadvertently not really looking at it, but just wasn't available so they went without it.

Speaker 1: 1:52

But I think it's important to realize that if you have a mortgage and an earthquake hits, you're still on the hook for that mortgage, even if you can't live in your house and you're not going to get anything from your insurance company. Now, a lot of times, parts of that will be covered, because maybe not all the losses due to just earthquake some of it could be due to fire or theft or things of that nature and that would be covered. But I think it's important to really look at your policy, see what it covers, look at the deductibles. Make sure you've got enough in savings to cover those. Also, many policies have a provision that says that they will pay certain number of months of rent if you can't live in your home. Make sure you understand what that is, because, as these natural disasters seemingly become more frequent, I think it's something that we all have to evaluate, and I know that we were really shocked at how much our homeowners insurance went up in costs. This year, wildfires, flooding, just general hailstorms in Texas have really caused their homeowners insurance to go up because it's taken out a lot of roofs. So every area has different sort of sets of risk associated with it, and I think it's important to make sure that you understand what your coverage provides and understand that you know insurance companies, to stay in business, have to charge a premium to offset their risk for protecting people beach people, like to live in the mountains, people like to live in certain areas, and sometimes we. Because of that, it can cause a density like what we've seen in California, so many people living in such a small area. So when something happens, it spreads super quickly and so you know, and the people that have had special building products, you, you know, instead of using wood they use concrete, and so it didn't burn. But I think it's important to realize that that's something that you should pay attention to as well.

Speaker 1: 4:22

The other thing I want to mention is where are you keeping your key documents, your passport Although getting a new passport is not the hardest thing in the world if you've got a copy. So it's important, I think, to maybe take advantage of the cloud, with appropriate firewalls, interestingly enough, and passwords to protect them. But it's a good reminder that you should have a copy of key documents, you know birth certificates, marriage certificates, your will, your power of attorney, social security card all of those things that in a pinch you would need. If you should keep them in some sort of fireproof box although if it's kind of an inferno, it may not last but if you have a copy of them, it's much easier to recreate what you had before or get a duplicate done. So I think that's important and something I would encourage you to do. Also, if you've got kids, your children's shot records, because they'll need those all the way up into college and beyond.

Speaker 1: 5:41

So keeping copies of key things like that also a good idea, for if you have some old family photos, maybe a good time to think about digitizing those so you also have those available, because some of those types of things, if we lose them, we can't get them back, and so we want to be able to have those memories. You know, furniture unless it's something that somebody in your family built that can all be replaced but our memories and our key items, we want to make sure we know where they are and how and can grab them quickly. So, um, if, if it's documents, having copies in the cloud, in a secure cloud, um, is a good idea. Apple's's iCloud is pretty secure and then Microsoft has their OneDrive. You just want to make sure you use secure passwords, not the same one you use for your banking or other information. Use a separate password. Same thing with email. Those are key items that you never want to reuse. The same password for key items like that.

Speaker 1: 6:52

But then other things that you may have, like some key jewelry or something like that, you may want to keep it in a certain spot so that if something did happen, you could grab it quickly and you knew where it was very quickly and you could get out, because you don't ever want to risk your life or the welfare of your family trying to grab things, because, while some things are irreplaceable, at the end of the day they are just things and it's people that can't be replaced. So just some kind of food for thought and things to kind of keep top of mind as we go throughout 2025. Thanks for tuning in. This has been another episode of Better Financial Health in 15 Minutes or Less.