Majority of Americans Believe They are Likely to Be Impacted by a Natural Disaster, Few are Financially Prepared: AICPA Survey

With the focus on the COVID-19 pandemic, the coming hurricane and wildfire season is likely not on many Americans’ radars right now. However, with tens of millions more Americans in a financially precarious position over the last couple of months, it’s more important than ever to be prepared for a natural disaster. Recent data found that while many Americans have taken at least one step towards being prepared, there are still more actions that can be taken in the short term to help protect their finances and their families should disaster strike.

Six in ten Americans (61 percent) believe they are likely to be personally impacted by a natural disaster in the next three to five years, including one in five (19 percent) saying they are very likely to be personally impacted. That’s according to an American Institute of CPAs (AICPA) survey of 2,050 U.S. adults conducted by The Harris Poll in the fall of 2019. Nearly four in ten Americans (37 percent) admit they do not have a good sense of how much recovering from a natural disaster would cost their family financially. And seven in ten (71 percent) say that such an event would have a major or moderate impact on their financial situation, including a third (33 percent) who said there would be a major impact.

Emergency Preparedness

The good news is nearly three-quarters of Americans (73 percent) have taken at least one step to prepare for a natural disaster, most commonly assembling a disaster supplies kit (34 percent), creating an evacuation plan (32 percent), or backing up and storing personal medical and financial records in a safe place (31 percent). The bad news is only 15 percent have created a disaster plan to protect their finances. And concerningly, a little more than a quarter of Americans (27 percent) have not taken any steps at all to prepare for a natural disaster.

COVID-19 Impact on Disaster Planning Preparations:

Banking Without the BankIf your bank branch is closed due to the pandemic, you may need some new options for accessing cash, depositing funds, and checking your account activity. Now is a good time to investigate alternative locations where you can use your ATM card to obtain cash without additional fees, and perhaps mobile banking which can allow most banking activities including check deposits and transfers between accounts.

Insurance CoverageIf you haven’t recently reviewed your coverage with your insurance agent, you’ll want to be sure your homeowner’s or renters insurance is up to date for changes in value, valuable items you’ve added like jewelry or watches, and special risks you may face like flooding. As a first step, be sure you know how to contact your agent, who may be working remotely or with a reduced staff under current conditions.

Safe Deposit BoxIf you have documents in a safe deposit box that you may need after a disaster, you may find that your local bank branch is closed or operating under restrictions. You can check with the bank’s main office to learn how to access the box if local restrictions apply and may continue.

Wills, Powers of Attorney, and Health Care ProxiesIf disaster results in incapacity, loss of a loved one, or serious injury, you’ll want to be sure that your legal paperwork is up to date. Your attorney may be working remotely under pandemic- related conditions. If your papers need an update, it pays to get a head start in contacting the professionals you will look to for help and advice.

Employment-Based ProgramsVisiting your human resources department to check on items that may help you manage through financial survival in a disaster, like your disability coverage or ability to borrow from a 401(k) or similar retirement plan, is likely not an option if your workplace is closed due to the pandemic.

The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association in the Commonwealth dedicated to empowering CPAs to thrive. Founded in 1909, the VSCPA has more than 13,000 members who work in public accounting, industry, government and education. For more information, please visit the Press Room on the VSCPA website at vscpa.com or call (800) 733-8272.