2 Big Lessons from Superstorm Sandy

Focus: ASSET PROTECTION

Terry Savage Image Terry Savage Author, The Savage Truth on Money

Protecting yourself before the storm may be dull, but it's a lot better than trying to piece your life back together after tragedy strikes, writes MoneyShow's Terry Savage.

In the past year, we’ve seen tornados sweeping across middle America, rivers flooding their banks along the Mississippi, and out-of-control wildfires destroying homes in California, Colorado, and Texas.

But watching the ocean sweep across Wall Street, flooding the New York Subway, and destroying a whole section of Queens and New Jersey must finally bring home our total vulnerability to nature.

An unexpected and life-changing event can happen to any of us—no matter where we live, or how much money or property we have amassed. And the consequences can be devastating—whether your home and contents are totally wiped out, or "only" your photos and personal finance records are washed away.

Businesses know they must have backup systems. But most Americans—even those who are good about organizing personal records—have no Plan B in case disaster strikes. Maybe it’s time to start thinking more seriously about that. Here are some suggestions.

Double-Check Your Insurance Coverage
Of course, you’re smart enough to have replacement cost insurance for your home and contents. But have you increased your coverage to keep up with rebuilding costs? Do you know your deductible—and what is excluded?

Hurricane coverage is not automatically included in your policy. Residents of the East Coast caught a break when Sandy was officially downgraded from a hurricane to a cyclonic storm. That meant wind damage was covered, something that would not have been a sure thing if the storm were still a hurricane, unless specifically included in the policy.