The coronavirus pandemic has battered Americans' household finances, but another major threat lies around the corner: hurricane season.
Only 15% of adults polled by the American Institute of CPAs have created a disaster plan to protect their household finances. The organization, which represents accountants, polled 2,050 U.S. adults in the fall of 2019.
Six out of 10 participants said they were likely to be personally affected by a natural disaster in the next three to five years.
June 1 signals the official start of hurricane season, and as many as 13 to 19 named storms are expected to hit the U.S. between then and Nov. 30.
Last year's natural disasters resulted in a total cost of $45 billion, according to the National Oceanic and Atmospheric Administration.
"The irony is that the hurricane season has had an early start, with Tropical Storm Arthur a week ago," said Neal Stern, CPA and member of the AICPA's national CPA financial literacy commission.
Indeed, Tropical Storm Bertha formed near the South Carolina coast on Wednesday morning.
The cost of a natural disaster would catch people at their most vulnerable. Consider that more than 38 million people have filed for unemployment benefits in the last nine weeks.
"If anything, the pandemic adds a level of complexity," said Stern. "There's a need to get an early start on things that would otherwise be difficult."
Drafting an evacuation plan and putting together a disaster supplies kit are good first steps for individuals to take, but don't neglect your finances.
Here's where you can start.
• Know your insurance coverage. Your homeowners policy may not be as comprehensive as you think it is. You might be subject to a hurricane deductible, which can be equal to 1% to 5% of your home's insured value, according to the Insurance Information Institute.
This is the amount you'd have to pay out of pocket before your policy begins paying out.
In all, 19 states and Washington, D.C., have hurricane deductibles in place, according to the institute.
The states are Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas and Virginia.
Be aware: Flood damage isn't covered by homeowner's insurance. You'll need to buy this coverage through the National Flood Insurance Program or the private market.
• Make sure your coverage is up to date. Whether you have renters' insurance or a homeowners' policy, review your belongings and make sure they're adequately covered. Renovated your home? Update your policy to reflect the increase in your dwelling's value.
• Boost your emergency fund. You don't want to hit your retirement accounts or ramp up on costly credit card debt to help cover your homeowner's insurance deductible.
"People often talk about a minimum of three months of expenses, but maybe up to six or nine months would be a decent benchmark for an emergency fund," said Stern.
Direct spare cash toward that emergency fund if you can, including your tax refund.