As Californians Brace for More Extreme Weather, Here's How to Storm-Proof Your Finances

What happened

Residents are preparing for more powerful storms after weeks of heavy rains wreaked havoc in California. The state is on high alert as forecasters warn of further flash floods, mudslides and powerful winds. According to the New York Times, the next storm could bring another four inches of rain as well as winds of almost 40 miles per hour.

So what

With more intense storms on the way, the National Weather Service has warned residents to sign up for alerts, pack go-bags, and prepare for further power outages. "This is truly a brutal system that we are looking at and needs to be taken seriously," it said. If you live in California, try to have sand bags, plastic sheeting, and other flood protections at the ready. 

At least two people have already died as a result of the storms and almost 50,000 homes and businesses are without power. While some residents have already been evacuated, others are sheltering in place as road closures make evacuation impossible. Since the ground is already waterlogged, more rain could lead to more serious flooding and damage.

Now what

As millions of Californians prepare for potentially life-threatening weather situations, insurance coverage may be the last thing on their minds. However, understanding what your insurance will cover and where your documents are can be an important part of every household's storm preparation.

If you're preparing a go-bag, make sure to pack your insurance documents. This includes your homeowners insurance, flood insurance, and auto insurance. You'll need information like your policy numbers and your insurers' contact information. Another step you can take before the storm hits is to inventory your home. Walk around and take pictures, document anything of value.You might email or text the files to a friend or family member in another state for safekeeping.

If the storm has already damaged your home or car, take as many pictures or videos as you can -- assuming it's safe to do so. Don't put yourself at risk, but if you're able to make a record of what's happened, it could help your claim further down the road.

Know what your insurance will cover

Be aware that standard homeowners insurance won't cover flood damage. Damage done by storms, fire, and wind are usually included in home insurance policies. That means you'll likely be able to claim if a tree gets blown into your home, but you may not be able to make a claim for the damage done by rising water levels. 

If you live in an area that's prone to flooding, mortgage lenders often require you to take out additional flood insurance. If you own your house outright, you may benefit from separate insurance against flooding.

In addition, it's worth knowing that comprehensive car insurance is the only type of car insurance to cover against flood damage. Other types of auto insurance won't protect you in the event of flooding or other types of storm damage. Plus, a lot of flood insurance policies don't include vehicles.

Whatever part of the country you live in, don't wait until a storm's about to hit to buy insurance or understand exactly what your policies cover. Most insurers put a moratorium on new policies when they discover a storm is on its way. You're unlikely to be able to take out home or flood insurance once a storm is imminent or has already arrived.