financial planning for natural disaster

I feel for you. I don't have a good answer for your situation.

I generally "refuse" to live in an area prone to "weather" disasters. Hurricanes can kill people. Tornados can kill people. earthquakes can kill people. I think this is a financial/ quality of life/ personal decision each person makes for themself.

I choose to live in the north... I have yet to see snow kill someone. Not being able to shovel it can be an issue, driving on it can be difficult, and even if it's not snowing, it can still be cold... but all of these assume I am still alive to complain about it.

I can also enjoy the snow by skiing, snow mobiling, sledding or other winter activities.

My wife and I also have put some thought into this, but we haven't come up with any earth-shattering answers. $10K in a water-tight storage medium is not a bad idea, Katrina left many of our friends without access to cash and unable to use credit cards. Keeping it safe from total destruction of your home (or theft) is an issue though. Perhaps a safe-deposit box in another city?

As to insurance, we'd consider renting just so that the landlord has to deal with that problem and not us. I personally know folks who are still fighting with insurance companies over Katrina. One of our friends has yet to start any work on her house (it was a complete loss).

Good luck,

-Will

That's a silly statement. Lots of people have died in car accidents caused by icy roads.

Not to mention people who have falls or heart attacks while shoveling

Don't restrict yourself to the United States. The best place I have found to live is in Kijabe, Kenya. At 7,500 ft altitude and almost on the equator, the climate is among the world's best. The people who live there are great, too.

Dave

Another possibility is to hold a few thousand in traveler's checks. They give some protection against loss or theft. And if the local banks were out of business you could still use them in a distant city.

I don't understand the rationale for holding onto so much actual cash, which seems much riskier than the original problem. Realistically, these are extremely unusual events and you can see them coming from days away. So maybe you grab a bunch of cash when a Cat 5 is on the horizon, but it seems unnecessary to hang onto it all the time. It exposes you to risk of theft, you don't earn interest, and you may just lose it all during the disaster anyway -- who wants to carry around a lockbox full of $10k? If you have $10,000 in cash you could have $10,000 in a savings account instead and take it out if needed. It might require a 20 mile trip to get to open banks and working ATMs, but I don't think that suggests the solution is keeping a lot of cash on hand -- rather, add a bicycle to the "disaster readiness kit"!

Though I will say that having this type of risk would be one of the reasons for having a true "emergency fund," perhaps a relatively large amount of money. Speaking of that, the lazy FAQ editor recently worked on that area of the FAQ site:

-Tad

I don't know about Kijabe, but Nairobi has a horrific crime problem. It's not a safe city at all.

At 7,500 ft altitude and almost on

Malaria seems to be increasing its range ie moving higher and further north in Africa.

The people who

This, I will agree. Most if not all Africans are great, but Kenyans are especially so.

Do you remember the Quebec ice storm? Toronto also took a quite severe kicking from Hurricane Hazel, although that was 1954. There have been changes to land use regulations since apparently which hopefully would prevent a recurrence.

Most places that get snow in North America also have fearsomely hot summers (think Chicago). That Continental Climate.

I have relations who, in North America, live in upstate New York and southern Canada. There is just less and less snow than there used to be.

The amount may be high, my wife and I actually discussed keeping $1k - $2k in cash. But not all events are seen from days away. Even the danger of Katrina had apparently abated before the levy breaches occurred, it hit New Orleans as a Cat 3. In any case, Katrina left our friends with no easy city to get to (it took days to get to Baton Rouge), little gasoline, and few options. People traveled with mucho cash after that, but remember crime was temporarily way down post-storm. However, the risk of theft is/was real. Besides the obvious, what little contractor labor was available in New Orleans to save your house (let's say you just had major roof damage, and not flooding) was motivated only by cash - no checks, no credit.

-Will