Insurance, Natural Disasters And Financial Relief Programs
Beautiful British Columbia is a great place to live. But there is one concerning issue: the increasing frequency of natural disasters. Flooding, wildfires, and intense storms are common in the province
Luckily, you can protect your finances and assets with insurance policies and financial relief programs. Let’s explore each of these safeguards to protect yourself from unpredictable events.
Insurance
Insurance is a financial arrangement where you pay regular premiums in exchange for protection against specific risks. In the event of an incident, the insurance company provides financial compensation. That reduces the financial burden on the policyholder. The types of risks covered and the extent of coverage depend on the terms of the insurance policy:
Homeowners insurance
Homeowners insurance protects your home, outbuildings, and possessions from some natural disasters, such as:
- Lightning strikes
- Wind
- Fire
- Some types of flooding
- Explosions
- Falling objects, unless the cause is an earthquake or avalanche
A standard home insurance policy typically does not cover damage from flooding and earthquakes. However, you can add coverage for these possible disasters to your policy for an extra fee. Catastrophe insurance could be valuable if you live in a high-risk area for these events.
Auto insurance
A basic auto insurance policy protects your car from various types of damage. If you want extra coverage, you can add all-perils insurance.
Renters’ insurance
Renters insurance covers loss or damage to your belongings. Personal liability and additional living expenses are typically covered (in case you need to leave your home during repairs). Note that renters’ insurance may not cover damage to your possessions from a natural disaster.
Small business insurance
Small business insurance is a type of coverage designed to protect businesses from financial losses due to various risks and liabilities. A natural disaster can shut down your operations. Damage to property, equipment, and supplies and an interruption in income are common problems. They can result from fire, flooding, earthquakes, or severe storms.
There are different types of business insurance, including:
- Property insurance
- Tools and equipment insurance
- Business interruption insurance
- Equipment breakdown insurance
Before purchasing a policy, review the terms and conditions. Knowing what the policies offer will help you decide what coverage you need.
Financial Relief Programs
When disasters are severe, governments and some businesses offer financial relief programs. These programs help those affected by the incident. The financial help can relieve anxiety about the economic impact of the disaster.
Government relief programs aim to cover losses that arise from sudden events that aren’t insurable.
Government financial assistance programs
The Ministry of Emergency, Management, and Climate Readiness (EMCR) oversees the BC Disaster Financial Assistance (DFA) program. The DFA program supports individuals, small businesses, farmers, and charities affected by natural disasters. Indigenous communities can apply to the DFA for Community for their needs.
In the event of a disaster, the DFA may offer government grants or cover damage to your principal residence and essential belongings. Private sector financial relief packages will pay 80% of the amount from $1,000 to a maximum of $400,000. That can include costs related to:
- Structural damage requiring repair or replacement, such as foundations, walls, and footings
- Broken windows, wall coverings, and fixtures
- Replacing or repairing personal effects like necessary furniture, flooring, appliances, and clothing.
- The removal and clean up of debris
Still, the DFA does not cover items your insurance or catastrophic insurance will pay for. That may include:
- Luxury goods
- Your insurance deductible
- Items that are insured or are insurable
- Secondary residences
- Landscaping
- Recreational items
- Non-essential items
Small businesses can access similar support with the Small Business Relief Program, but there are extra costs the DFA may cover (such as debris clean-up and repair or replacement of business materials).
How to access disaster financial assistance
The government determines what natural disasters qualify for relief (flooding and wildfire relief are often covered). Announcements are posted on the government’s website. You can also find details about any events eligible for coverage there.
If the natural disaster is eligible, review the expenses they cover. If applicable to your situation, apply for aid. Once the DFA receives your application, they will decide how much coverage you qualify for, if any.
If you disagree with the decision, you can appeal. You can appeal denials and the amount awarded. To appeal, you must submit a written request within 60 days to the Disaster Financial Assistance Program. An appeals adjudicator will review your claim and contact you with an answer after their decision.
Financial support from businesses
Financial institutions sometimes offer additional aid. For example, banks often provide support to their customers who live in the area of the event. That can involve things like deferred payments for your mortgage, loan, and credit card payments. Or, they may reverse refunding feeds on ATMs or overdrafts on accounts. Plenty of organizations offer unique relief programs to help business owners as they rebuild.
If a natural disaster occurs, contact your bank. Ask if they offer any support to their customers. Help from your financial institution can save money and protect your credit rating.
Debt Payments During a Disaster
Insurance claims, financial assistance programs, and help from your bank are valuable tools for getting back on your feet. Sometimes, though, it’s not enough. Your insurer may not pay enough to cover your claim, or you may be unable to afford the deductible. You may not get enough money to rebuild. And if you can’t get back to work, payment deferrals will only help for a short time.
The effects of a natural disaster can be severe, but the financial fallout doesn’t have to be. You don’t need to let your debt stop you from rebuilding your life. At Chase and Associates, we can help you eliminate your debt and prevent legal or collection activity. Call us at 1-866-317-8331 for a free consultation. You can also set up a meeting with us using our online form. We can help you put your financial difficulties in the past so you can return to building a life you love.
