When Disaster Strikes: Understanding Home Insurance and Protecting Vital Documents

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 .

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 . 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 .

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 .

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 .