How to financially prepare for a natural disaster

If it feels like every time you turn on the news, there's another natural disaster, you're not wrong. In 2024, there were 27 confirmed weather disaster events with losses exceeding $1 billion each in the United States, according to the National Centers for Environmental Information (NCEI). We often think, “That won’t happen to me,” but the reality is, most areas of the country are under threat for some type of natural disaster. Whether it’s a tornado, a wildfire, a hurricane or a flood, Mother Nature can wreak havoc—and quickly.

How to prepare
In addition to being emotionally devasting, having your home and belongings damaged or destroyed can be a major blow to your finances. Our financial experts provide tips on how to be prepared:

Build your emergency savings. While most financial planners advise three to six months in savings to cover a job loss, preparing for a natural disaster will require additional contingency savings to replace shelter, belongings and a potential income disruption if your workplace is also impacted.

"We really need to change our thought pattern on how much emergency savings we need to have," said Teri Byrne, financial planner at BOK Financial®. "It's more than it used to be."

A savings goal for a natural disaster should include covering your family's basic needs, such as shelter in a hotel, clothing, gas, food and personal care for a minimum of two weeks. Though your home may not sustain damage, access to your neighborhood may be blocked to clear debris and assure safety. Many residents in the LA fires in January 2025 were kept out of their neighborhoods for over two weeks due to contamination in the area. Even those who did not lose their homes returned to find their interiors so damaged from smoke and water that their homes were unhabitable.

Ensure access to credit. If you don't have enough cash on hand when a disaster strikes, having credit can be a backup. Minimize debt and work to maintain a high credit score, so that you have credit or the ability to get a loan, if needed to tide you over.

"You may also want to consider keeping at least one credit card with a high credit limit and balance paid off on hand in case of an emergency," suggests Byrne.

Ensure appropriate homeowner's insurance. Byrne suggests understanding if your home is subject to natural disasters and annually asking your insurance agent if you're adequately covered. Remember that coverage for some disasters, such as earthquakes or flood insurance, may require separate policies. If you rent, she recommends considering renter's insurance in case a disaster causes loss of your belongings.

"We encourage clients to go through their house and do a video of everything, talking about all the items so you have a mini-movie of what you have, not just a picture," said Byrne, who also recommends keeping itemized records and receipts of all high-value items along with appraisals.

Organize your financial life. Documents such as insurance policies, personal finance records and statements, emergency contact numbers and disaster resources will be your lifeline if you have to evacuate for an extended period or rebuild.

"This is a compelling case for consulting with a financial planner or advisor and having a comprehensive financial plan put together that shows all your accounts, insurance coverage and net worth in one place,” said Byrne. "And don't forget to designate a financial power of attorney who knows all of this information and can take over your finances if you become incapacitated in a disaster."

Keep your important documents on an external jump or hard drive that you can grab in an evacuation. It should be stored in a cloud or at an offsite location, such as a trusted family member's home or a safe deposit box. Also be sure to review the stored documents annually to see if they need to be updated.

Have a go bag. If you live in an area that’s prone to severe storms or wildfires, have cash, clothes, personal care, non-perishable food and your important documents in a bag you can grab on the way out the door. Include some identification with your home address in case the area is closed off to prevent looting and you need to show proof of residency.

"Don't forget to put some things that will make you comfortable in your go-bag," said Chrisanna Elser, financial planning specialist at BOK Financial. "If you're kept away from your home for an extended period, once you've filed the insurance claim and any other paperwork, then you just have to wait, and you'll want something to entertain yourself and your family."

 

See a full list for go-bag essentials.

After a disaster
If you need to evacuate, your priority is to find a safe place to stay, whether it's with friends and family or a hotel.

First, you'll need to know if your home is still standing. To prepare for this ahead of time, "get some sort of surveillance camera in or outside of the home such as security cameras, or even a pet cam so you can see what's going on via a phone app," said Elser.

Once you know the state of your home, you can call insurance companies and the Federal Emergency Management Agency (FEMA), which helps citizens and emergency personnel recover from disasters and start making arrangements. An organization called Project Porchlight can assist those who need help filling out paperwork or finding resources. Your financial advisor or planner should be able help you navigate access to emergency funds and liquid assets, as well as offer support so you make informed decisions about your next steps during a stressful time.

Above all, keep in mind that rebuilding will take time, but having a plan will make the process smoother. "If there is anything good that has come out of recent natural disasters, it's made us more aware of what could happen and how to prepare," said Byrne.