Before Disaster Strikes, Get Prepared
Whether it’s a hurricane, flooding due to heavy rain, or a tsunami, doing all you can to protect your home and property should be a top priority. In the last three months alone, five hurricanes — including Category 4 storms Ignacio and Jimena — narrowly missed the Hawaiian Islands, and are reminders that it is prudent to be prepared.
Meteorologists are warning residents that strong El Nino conditions may continue to intensify throughout the hurricane season — and that may mean more hurricanes for Hawaii. And while it’s true you can’t do anything about the weather, it is worth the peace of mind to do what you can to be prepared in the event of an emergency.
Gordon Ito, insurance commissioner for the state of Hawaii, encourages residents to prepare by reviewing their homeowner’s insurance policy. This is especially timely as property values have been rising. Learn the differences between hurricane insurance and flood insurance, as they cover different types of damage.
Preparing your home for weather events by outfitting your home with wind-resistant devices — such as hurricane clips for your roof, storm shutters, or impact-resistant windows — will decrease your financial risk in the case of major storm damage. Other projects might include fixing or upgrading your foundation or siding. Roof damage and broken windows are the most common big-ticket repairs needed after serious weather. Some of these improvements may get you premium discounts — check with your insurance company. Think about being proactive with roof maintenance — maybe it’s time for a new roof — to prevent interior damage to your home if your old roof is blown off or damaged.
Consumers often use their home equity to pay for these improvements. While HELOC (home equity line of credit) products are traditionally used to renovate kitchens and bathrooms, to install a photovoltaic system, or split air conditioning units, with an increase in storm activity, more and more homeowners are opting to add extra protection to their home. A HELOC gives you immediate access to funds in case of an emergency.
“Interest rates on HELCOs are still low and are usually lower than credit cards or other unsecured loan options,” says Derek Wong, Vice President of Credit Products at First Hawaiian Bank. “You have access to your line at any time to pay for home improvements, as well as for other needs and emergencies. Also, you don’t have to save up in order to pay for these projects, meaning you can complete the improvements sooner.”
Additionally, with a HELOC, you don’t make any payments or accrue interest on the loan until you draw on the funds.
“Emergency funds don’t necessarily mean having it in a savings account, it may mean having quick access to these funds, “ adds Wong. “Having a HELOC can help to free up some of the cash reserves you may have for smaller necessities to help prepare for emergencies.”
So far, we’ve been lucky. But this El Nino-driven hurricane season is not behind us yet and it doesn’t hurt to start planning ahead for next year. Take the time to be prepared…and remember, the last thing you want in an emergency is to be financially strapped.
For more information about HELOCs or other financing options, talk to a personal banker at First Hawaiian Bank Today.
Taking Care Of Business
When it comes to financial preparedness, consider the following advice:
• Check that your insurance policies are up-to-date and that the coverage is sufficient to meet your needs. This includes homeowners, hurricane/flood, auto, and health/medical.
• Take proactive steps to protect your property from loss, which may also reduce insurance premiums, in some cases.
• Establish emergency funds or have access to cash or a line of credit. A HELOC is a convenient and flexible tool to pay for unexpected needs as well as planned projects.
• Secure your important personal and financial documents. Consider a safety deposit box to store valuables and important documents.
• Take inventory of your personal property to make filing a claim easier.