Cyclone Tauktae: Money lessons for safety amid natural calamities

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Cycle Tauktae has taken a toll on many and caused massive destruction. Natural calamities leave behind a trail of devastation. If you are one of those affected, you would know the importance of financial planning for such eventualities.

Here are a few money few lessons that can hold us in good stead:

Buy adequate insurance

Insuring all your assets matters a lot. Buy the right covers for your house, office and your life too. Many a times, individuals cut corners while buying insurance covers. Be it cyclones, floods or earthquakes, there is always a possibility of lives lost. If you are the breadwinner of the family you should have adequate life insurance so ensure that in case something adverse happens to you, the family will be protected financially.

Also, there are many instances where individuals have lost their property or vehicles either because of fall of tree or because of flooding and they could not recover the value lost, because they only had third party insurance. Absence of own damage cover thus lives such affected persons without any compensation. It is important to insure your assets for the right sum assured. Do not under-insure yourself, just to cut the premium.

Also you should purchase adequate health cover just in case the natural calamity leads to your hospitalisation. Medical costs are becoming prohibitive and can cause huge dent on your personal finances if you do not have enough health cover.

Keep documents in digital format

Despite all the emphasis on digital technology, there are many individuals who do not have the documents of their insurance policies covering their house, office or cars. In cyclone when the houses collapse or cars get washed away in floods, the documents are sometimes lost. Such individuals find it difficult to file a claim and get the compensation from the insurers. Keeping the insurance policies in insurance repository account or in digilocker can help.

Maintain an emergency fund

Each such natural calamities like floods or cyclones result in many losing their source of income or livelihood. Financial planners always suggest building an emergency fund by each household. The fund has to be built during good times. Covid19 pandemic would have already taught you a lesson. If not, it is time to understand the importance of having an emergency fund after cyclone Tauktae Keep at least six months of your expenses and EMI in safe bank fixed deposits or liquid funds. They do come in handy in case of a medical emergency or loss of job or a big financial emergency in your family.

Ensure you have cash in hand

You should always maintain some cash in hand since natural calamities can result in your being unable to access the bank or ATM for some days. Despite the digital push, there are many day-to-day transactions for which you need to have ready cash available. The amount of cash required will differ from household to household and you need to make your own assessment to meet the immediate payments

Learn quickly

Last year Western coast of India – especially Mumbai saw Nisarg Cyclone. Mumbai is not used to cyclones, though Gujarat does. Six persons lost their lives and it is estimated that the property worth millions was lost in Cyclone Nisarg on June 3, 2020. That was seen as an aberration for Maharashtra, as cyclones have rarely hit it. Tauktae cyclone is the second cyclone hitting Maharashtra in a row. For those in Maharashtra who learnt the right lessons, must have bought home insurance and personal accident insurance covers. If you ignore such incidences and let ignorance towards insurance protection then there is a fair chance that you will be caught off guard. Learn at the first instance and take appropriate actions.