Caitlin Constantine
Appearances
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Well, Sean, early in this series, we pointed out that when people hear news about climate change, it's often in the context of some catastrophic natural disaster, like a tornado, a hurricane, wildfire, flooding.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So realistically, I mean, as much as I would love for people to come back and revisit this podcast, they're probably not going to come back and listen immediately. if the worst happens. So where can they store some information about hardship programs that might be available to them? Or is that just going to become available to them post-disaster?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Can you talk a little bit about how they can keep track of that information?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So to keep talking a little bit more about complicated financial aspects, let's talk about taxes. So I'm actually not sure if there's a way to prepare your taxes for the possibility of a disaster. But if you do happen to become a victim of a disaster, what are some important steps that you might be able to take with your taxes?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Okay. You live in a place that's prone to tornadoes. I've lived in a place that's prone to hurricanes. So we both unfortunately know that a reality of disasters is that scams are not uncommon in the So can you give our listeners some tips for how to avoid being duped during what's probably going to be one of the worst times of their lives?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Yes, they seem that way because they actually are. In fact, the World Meteorological Organization, which is an arm of the UN, released a report back in 2021 that showed that climate change has caused an increase in weather-related disasters by fivefold over the last 50 years. And so today, we're going to address that directly.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Okay. That's actually a really, really great tip. So in fact, all of this has been really, really great information. Here's hoping our listeners never need to use this information, but I'm glad we've been able to share it with them today in case they do. And thank you so much again for taking the time to join us today.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Oh, for sure. Like who spends their time thinking about what am I going to do if my entire life just gets wiped away in one storm in one instance, right?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Your brain playing that over and over again just as like a lullaby to get you to go to sleep. I'm familiar with that song. So before we wrap up, though, I do actually want to take a minute to talk about one thing, which is something that's called Project Porch Light. So Kate mentioned it, and it's part of Money Management International's Disaster Assistance Program.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And they help with everything from filling out all of those forms from FEMA to understanding the role of the Small Business Administration and working with your home insurance. They're basically a one-stop shop for help in the aftermath of a disaster.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So you should keep in mind that the post-disaster time is usually incredibly stressful because you really just went through something that's highly traumatic. And it may be tempting to think right now that you could manage it all on your own. So folks, get a pen and paper and write this down and stash it somewhere safe. Their phone number is 877-833-1742.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Here's hoping you never need to use it, but it's better safe than sorry, right? Absolutely.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Right. Embrace your inner Boy Scout and be prepared. But, you know, I do agree with both of your points. I have a friend who worked for more than 20 years doing humanitarian work in conflict zones. And something she told me that has always stuck with me, which is that a society in conflict doesn't just like cease to exist overnight. It's more like things just get harder to navigate.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
You know, resources are a little harder to come by. Systems are slower and less efficient. But you still keep on living your life despite everything that's happening all around you. So I think that climate doomerism is a really understandable position to take on this. But ultimately, all it does is leave you unprepared to deal with the future, whatever that ends up looking like.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So I'm very fortunate in that I've never lost everything, just a fence, a roof, and a fridge full of food. But it is something that's always a possibility, no matter where you are. So better to be prepared, and we're going to help folks do exactly that. Because please, please, please, you really should.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Most definitely. So this is a common thread throughout the whole course of this series, which is that there's this big need for those larger systemic solutions. But that need for systemic solutions doesn't mean that we as individuals are totally powerless. We have our dollars, we have our votes, we have our voices, and we have our individual actions and choices.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And I really think it's important to remember that a system doesn't exist independently of the people who comprise it. We are part of the system. which means we can and we do influence it all the time. And I think that if we keep that in mind when thinking about climate change and we act accordingly, we might end up surprising ourselves with what we're able to accomplish when we all work together.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. And with that said, until next time, turn to the nerds.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
I was reading through a 2019 report from the Urban Institute that is all about natural disasters and finances, and it's pretty sobering. So events like these lead not just to the obvious issues, but ultimately they can lead to lower credit scores, more debt going into collection, bankruptcy, foreclosure.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
You can see how the impact just cascades through every aspect of a person's life with ramifications that last for years beyond that initial recovery period.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
You know, honestly, me neither, but somebody has to do it. So I reached out to Money Management International, which is a nonprofit financial counseling agency. And Kate Bulger is one of their disaster point people. Sean, do you happen to remember the huge EF5 tornado that wiped out a huge swath of Joplin, Missouri in 2011?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Well, that was a turning point for Kate. She spent time there in the aftermath, and she got to see just how devastating it is and how long recovery can take. And she's been working in disaster recovery, especially financial recovery, ever since then.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Kate, thank you so much for joining us today. We're so glad to have you. Thank you for having me. So by and large, how prepared financially do you think most of us are for the possibility of a natural or even a man-made disaster happening? What do the numbers tell you about what that looks like?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
I wonder if part of this whole dynamic is just people actively avoiding thinking about this, or maybe there's a little bit of denial. I mean, the idea that something could come through and could wipe us out financially without us even being aware of it or prepared for it. It's kind of hard to sustain that level of concern over time, right?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Mm hmm. This is a big topic. So I want to break this up into two categories for our listeners. First, to talk a little bit about what our listeners can do to plan for a disaster ahead of time. And then we can talk about what they should do afterwards if, God forbid, a disaster actually happens to them. So let's go ahead and we can start with the planning phase.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
I focus on home insurance at NerdWallet. So I know that one of the first steps that you're supposed to take is to do a home inventory. And actually, this is the case even if you don't own your home. So can you walk us through what's involved with this process?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And with most of us having a smartphone, it sounds like that's a fairly straightforward way to do it. But I have actually read some stories where people who did their home inventory through a video, they ran into some issues with their insurers because they didn't have receipts to go along with that inventory.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
I mean, that would be a pretty massive shoebox to have receipts for every single thing that you own. Do you have any sort of thoughts about that?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
This actually kind of leads into the next question, which is related to financial inventories. So there are people, you know, I know some people who do this, they keep their lists of their bank passwords and their account numbers in a file in their desk at home. which is great until your home is destroyed in a hurricane or a wildfire, and then you're possibly out of luck.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So how do you recommend that a person takes a financial inventory and keeps it safe so that they don't run into this potential issue?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So one of the problems that we know that people will sometimes run into after a disaster is that banks and ATMs are like they're not functional or maybe they're just entirely gone. So there's advice out there to keep cash on hand. Do you agree with that advice? And if so, how much cash should people have and where should they be keeping it?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
We talked earlier in this series about home insurance and making sure that you're as covered as possible for an event that could potentially wipe out your housing. But are there other insurance options that listeners should be looking into?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
You are singing the song of my people with this one. What else can our listeners do to prepare their finances for the possibility of a disaster?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So I've seen that you've actually also talked about making sure that your credit score is solid in this context. Can you talk a little bit about that as well?
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So let's talk now about what we should do if the worst does happen. Say that your home is flooded or it's been burned to the ground in a wildfire or a tornado hit and, you know, your stuff is everywhere. After you've made sure that everyone is safe and alive, who should you be calling first? Do you call FEMA? Do you call your insurance company, your bank?
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Thanks, Sean and Sarah. I'm always happy to join you, but my gosh, the circumstances for this conversation could not be worse.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Right. We've seen Florida, California and Louisiana all have challenges with keeping insurers for a variety of reasons. But underpinning all of this is the fact that climate related disasters are becoming more common, more extreme and more costly. So let's take California.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Over the past few years, California has actually seen several major insurers, like Allstate, State Farm, and Farmers, either stopped writing new home insurance policies or they declined to renew other policies. And in fact, in July, State Farm dropped about 1,600 policies in Pacific Palisades alone.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Insurers say that the cost of paying for wildfire losses has been greater than what they were able to collect in premiums, so they chose to reduce how much they were covering in the state instead of continuing to take those losses.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
So these new regulations require insurers to write more home insurance policies in areas with high risk of wildfire. In exchange, those insurers can make changes in how they set their rates, and that's likely going to result in higher premiums. So to put it simply, more California homeowners will likely have access to home insurance, but they're going to have to pay more for it.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
The regulations may be starting to work as intended, as some insurers have recently announced that they would resume business in the state. But that said, we don't know how the wildfires are going to impact this. Now, it's also worth noting that there's a one-year moratorium on dropping home insurance policies in the areas affected by the LA wildfires.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
The California Insurance Commissioner also called on insurance companies to rescind non-renewals that were issued in the 90 days before the wildfires, and then to also cancel pending non-renewals. These moves should help homeowners maintain coverage when they begin to rebuild after the fires.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Sadly, it's becoming more and more common. We've been seeing home insurance costs increase around the country as extreme weather becomes more destructive and happens more frequently. And it's not just the usual suspects like Florida, Louisiana, and California.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Last month, the Senate Budget Committee released a report on climate change and insurance that indicated parts of southern New England, New Jersey, New Mexico, Oklahoma, and the Carolinas may not be far behind. That report also warns that if these trends continue, we're going to start to see this impact property values.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Well, it's a little soon for us to know how much our premiums will go up. But we do know that last week, North Carolina's insurance commissioner approved an average rate of increase of about 15% across the state that will take effect by the middle of next year. So it's safe to say that many of us are going to pay more for home insurance.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
I will say that one thing we do know for sure that posed a huge problem for us, a lack of flood insurance. So standard home insurance doesn't cover flood damage. You have to have flood insurance specifically for that.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
And an analysis done by a local nonprofit news group, Asheville Watchdog, they found that less than 1% of the buildings in Buncombe County, which is where Asheville is located, were covered by flood insurance. So that means that a significant number of people who lost homes and businesses when the French Broad River flooded will not have nearly enough money to rebuild.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
And Asheville's not alone in this regard. A new report from the Consumer Financial Protection Bureau found that people who live near inland rivers and streams are more likely to go without flood insurance than people who live near the coast. And unfortunately, the report also found that people who live near rivers tend to have fewer resources to recover than do people who live near coasts.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Well, it's important to remember that the point of insurance is to spread the cost of recovering and rebuilding over a wider group of people instead of expecting individuals to shoulder those costs entirely on their own. And so it follows that when more of us file bigger claims more frequently, the pool of money we're being paid out from has to increase as well. And that's when premiums go up.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
I think it's an indicator of the scope of this problem that the cost of paying for weather-related damage has become so high that the increase is being felt even in places that don't see a lot of extreme weather.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
But we've been seeing home insurance rates increase almost across the board for a few years now. Partly that's been due to inflation, but partly it's due to the aforementioned increase in severe weather. In 2023, premiums increased by more than 11%, according to S&P Global. And then in 2024, our average rate for home insurance in the U.S. was $160 a month, or a little over $1,900 a year.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
And that was calculated before the most recent disasters in LA and Florida and North Carolina. So we're getting ready to do our analysis for the upcoming year, and we fully expect to see rates go up once again.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Well, in recent years, insurance premiums have become so costly for so many people that they now are paying more for insurance and taxes than for the mortgage itself. And this is yet another factor that's making home ownership unaffordable for so many people, especially first-time buyers.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
It's not just that the house itself has become so much more expensive, but it's also much more expensive to insure it. And if you have a mortgage, you can't go without insurance. Plus, it's no longer a predictable expense, as so many of us have seen big increases in our home insurance year over year.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
So even if you can swing the expense one year, who knows if you're going to be able to manage it three or four years down the road. And renters, this is going to impact you as well. Your landlord is going to end up paying more to insure that property, and those costs will be passed down to you.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
So first of all, if you get hit with a big insurance bill, you definitely should shop around for a new policy. We recommend getting quotes from at least three insurers. You can start on our site. If you do a search for NerdWallet home insurance quotes, you'll get a page and you can get started by entering your zip code on the page that comes up.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
When you are getting quotes, it's really important to make sure that the quotes have comparable levels of coverage so that you are measuring apples to apples. If insurance is scarce in your area, which it very well could be, your best bet is going to be working with an independent insurance agent.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
They will know about all of the good insurers who sell in your area, not just the ones with the big ad budgets or the goofy mascots. And another money-saving tactic is raising your deductible. We found that if you raise your deductible from $1,000 to $2,500, you can save on average nearly 13% on your premium. But if you do this, it's super important to make sure you can cover that expense.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
And really, it's important that you make sure you read your policy carefully. You might have a separate deductible for hail or wind damage. In fact, your policy is going to have all kinds of details about possible exclusions or limitations. So it's really critical to read it and make sure you understand it. One thing we don't recommend doing to save money is reducing how much coverage you have.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
It may be tempting to save money by lowering your coverage limits. But if disaster strikes, you're going to be very glad you're not underinsured.
NerdWallet's Smart Money Podcast
Rising Insurance Costs and Choosing the Best Savings Account for Your Money
Thanks so much for having me.