Unexpected events are eerily inevitable. Knowing when, where, and what is the hard part. This is particularly the case when trying to gauge how much money will be required if an emergency occurs.
While we recently covered ways to generate emergency funds, we felt it was necessary to cover the common areas in which these funds get spent. By preemptively calculating their cost, families can better manage money if and when an emergency occurs:
Floods, hurricanes, and tornadoes wreak millions of dollars of destruction on American homes every year. Insurance usually covers the cost of temporary housing, but the check doesn’t arrive overnight. Get an idea of how much money will be required for a family-sized hotel suite on an extended stay. Call up area hotels and motels to get quotes and make sure your emergency funds match the amount.
Many life emergencies lead to legal woes. Traffic accidents are statistically the most likely of these events to happen to the average person. In the event you or a loved one are hurt in a vehicle collision, it’s critical to seek a reputable car accident lawyer in your area. Once again there’s a good chance you won’t have to pay anything in the long run but there may be upfront fees. Be proactive and call these firms ahead of time to see whether there’s a need to have funds available for legal assistance.
Most folks prefer liability-only auto insurance because it’s usually a lot cheaper than full coverage. However if your car is damaged in an accident and you’re at fault or the other person is not covered, you’re on your own for finding a way around. This can be true even if you’re not at fault. Payouts are delayed if injuries are involved. Even though this is to your long-term benefit as the injured party it means the costs of car rentals and ride-shares need to be covered in the meantime. Check local rental prices from numerous agencies. If Uber or Lyft is active in your area take a glance at their rates.
Disability may call for a wheelchair ramp to be installed onto your home for access. It counts as a tax write-off, but that doesn’t mean it won’t cost a pretty penny to have built. Call area contractors to see if they’d be willing to come by and give a quote on the cost of constructing a ramp. Additionally, not every destructive catastrophe at home will be covered by your insurance policy. Get a grasp of how much it may cost to pay out-of-pocket for sewer backups, termite damage, and repairing damage caused by acts of terrorism, all of which are not covered by ordinary homeowners insurance.
Having access to emergency funds when an unexpected crisis occurs is standard advice for any household. However getting a rough idea of how much such emergencies will cost in the long-run is an often overlooked article of this policy. What may seem like an adequate stash of cash may not be enough to cover the costs of life’s more common emergencies and disasters. If preparedness is the goal, then be prepared for how much you’ll have to pay.