April is National Financial Capability Month, a great time to check in with your clients about how prepared they are financially for disasters or emergencies. FEMA’s National Flood Insurance Program, together with the Association for Financial Counseling & Planning hopes that by encouraging individuals to have a financial plan for such emergencies, we can begin to build a true culture of preparedness in every home and community across America.

According to FEMA’s 2019 National Household Survey of 5,000 respondents, many consumers are not prepared for a financial crisis. Statistics show:

  • About half of all adults have less than $700 set aside for an emergency.
  • While 80 percent of households have homeowners or renters’ insurance policies, only 23 percent of households have flood insurance policies.

With attention to flooding, it is the most common and costly natural disaster in the United States. Just one inch of water in a home can cause up to $25,000 in damage. Based on these survey findings, if a disaster or emergency were to occur, like a flood, most adults would experience some sort of financial burden. 

As a financial professional, how can you help? Here are some general preparedness actions that you can take to help your clients prepare for the unexpected:

  1. Work with your clients to review their financial wellness and develop a financial plan that includes unforeseen emergencies. Help them understand their risks and the importance of saving for an emergency. Use the financial preparedness tips and the Emergency Financial First Aid Kit available on FEMA’s Ready.gov, a national public service campaign, to help get your clients started with planning today.
  2. Encourage your clients to purchase a flood insurance policy. While FEMA’s National Flood Insurance Program insures more than 5 million Americans so they can recover quicker more fully after a flood event, many more are uninsured or under-insured. Most homeowners and renters policies do not cover flood damage. With flood insurance from the NFIP, your clients are protected before, during, and after the storm.
  3. Help your clients start an emergency fund before a disaster strikes. The best way to be financially prepared for a disaster is by saving. People who invest in products like flood insurance make a habit of saving regularly and prepare themselves for unexpected events. Offer support by emphasizing the importance of proper insurance coverage.

You are uniquely positioned to advise your clients on how to prepare for an emergency. National Financial Capability Month is a great time to help them collect and secure critical records, purchase the proper insurance coverage, understand the actions they should take to better prepare for a financial emergency, develop and assess their preparedness plan, and start an emergency fund. This will help give them peace of mind and, in the event of an emergency, ensure they can start the recovery process without delay.

Visit the AFCPE Financial Preparedness Resource page for additional tools and educational resources.

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