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Recovering Financially from Natural Disasters

Tennessee is prone to flooding and tornadoes in the spring. Those who were affected by the May 2010 floods in Middle Tennessee or the recent storms that swept across the South know that all too well.

While tornadoes and floods are more common for this area, natural disasters like fires could damage your home. It’s best to be prepared for any kind of disaster.

Advance planning

Homeowners should make sure their family knows where to meet and what to do. Tips for helping your family stay safe and communicate well during a disaster are available at www.ready.gov.

Keep all important papers in a fire-safe box, including enough cash to provide for your family for at least three days. Cell phones may not work in a disaster, so be sure to put a written copy of all important numbers in the box.

Conduct an annual insurance review to make sure you have the coverage you need for your area. Be sure to factor in any major purchases or home upgrades you’ve made over the past year.

No matter how well you prepare, you can’t prevent a natural disaster from occurring. Here are some of the financial options you have if flooding, tornadoes or other natural disasters affect your home or vehicle.

Insurance

Collect all of your policies and call your advisor to make sure you don’t overlook any potential coverage. Don’t assume that if you don’t have a specific disaster policy, such as flood insurance, that nothing will be covered in the event of a flood—there are other potential causes of damage or portions of your policy that may apply in situations like this.

Make a list of damaged or lost items and include their purchase date and value with receipts, if possible. Take photographs of all of the damaged property, including discarded objects and structural damage. If you must make some repairs to prevent the possibility of additional damage, document the remediation efforts and keep invoices.

FEMA assistance

If the president declares your county a federal disaster area, FEMA may be able to fill in the gaps if you sustained losses in that county and insurance doesn’t cover it. This assistance only will cover costs to bring your home up to a minimally habitable standard. FEMA will come to your home to inspect the damages. FEMA assistance is capped at $29,900, including any FEMA Housing Assistance you may have received.

FEMA Housing Assistance is available to cover some of the costs of staying in a hotel or even with a relative if you were forced to evacuate your home. More information is available at www.DisasterAssistance.gov or 1-800-621-FEMA (3362).

SBA loans

In a declared disaster, credit-worthy borrowers may be eligible for a federally subsidized Small Business Administration (SBA) loan. These low-interest rate loans may be up to $200,000 to repair or rebuild your home and $40,000 to replace lost possessions even if you do not own a small business. The SBA will arrange to come to your home and inspect the damages.

If you have any questions about how to file a claim or apply for assistance, please contact your insurance advisor. Be aware that when catastrophic damage occurs to an area, it may take longer to process claims and applications and make payments because of the sheer number submitted.

Ken Halliburton can be reached at 615-494-9610 or ken.halliburton@mlbins.com.

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