When Disaster Strikes, Your Insurance May Not Cut It

Published

June 17, 2013

Jeanne Kelly is a nationally recognized authority on credit, the founder of The Kelly Group and the author of The 90-Day Credit Challenge. She has appeared on The Today Show, and blogs for Huffington Post & Poughkeepsie Journal. Visit her online at www.JeanneKelly.net.

In recent weeks, we’ve seen some pretty devastating weather disasters around the U.S. In fact, we’ve seen devastating ecological events globally during the past decade — tornadoes, tsunamis, hurricanes, floods, earthquakes; the list goes on and on.

For some of these potential disasters, we have insurance available to help us rebuild. When we do have that insurance, we have peace of mind that our precious belongings can be replaced if disaster should hit.

But insurance isn’t always available for every disaster. Nor will it always adequately cover the cost of rebuilding or replacing that which is damaged. And even if you do have adequate coverage, it can take months for that money to be paid.

One thing that isn’t considered is the “meantime.” What do you do in the meantime – after disaster has struck, but before you get paid from insurance (assuming that you have insurance at all)?

A Lifeline in a Disaster

This is where credit can help. A good credit score gives us access to money when we need it. It enables us to bridge the gap between disaster and the eventual recovery.

When disaster strikes, you often need emergency supplies like food, water, clothes and fuel when you can’t access the supplies you owned. Good credit allows you to have a credit card to buy those things.
When disaster strikes, you might need to temporarily replace key belongings (such as a car or furniture) and if you don’t have savings to dip into, you’ll need a loan. That’s where your credit also comes in.
When disaster strikes, you might need to rent a temporary living space while your house is being repaired or rebuilt. Landlords may pull your credit information before they rent to you.

And that’s assuming you have insurance. If you don’t have insurance, or if insurance is not available or does not cover the particular disaster you faced, your credit will be the tool you rely on to help you. There are many reasons to have good credit: access to money when you need it, a competitive edge in the job market, and credit is even growing in importance in burgeoning romances.

Just as insurance gives you peace of mind and allows you to sleep at night, knowing that you are covered for disasters, so too does credit. Credit is the way you can bridge the gap in an emergency and ensure that your family’s health and safety are looked after while you wait for insurance to help you rebuild.

Image: Zoonar