<< continued   Your Financial Situation Could Be Affected by a Quake... Aid may not be immediately available following a major disaster. Without proper planning, the financial impact of an earthquake on you and your family could be devastating. Although many things are out of your control after a quake, your ability to recover financially depends on a number of factors that you can control. Prepare and follow a financial disaster recovery plan and you will be more likely to recover successfully. Consider the following:

Don't be fooled! -- Myth number 3 "HOMEOWNER'S INSURANCE WILL COVER ANY DAMAGE TO MY HOME OR BELONGINGS CAUSED BY AN EARTHQUAKE." Most residential property insurance policies do not cover damage resulting from earthquakes. A separate earthquake insurance policy is one way to protect your home and the investments you have made in personal belongings. Investigate your options carefully to ensure that your assets are sufficiently protected see http://www.EarthquakeAuthority.com/

Will you have money, food, and medicine? Bank operations may be disrupted, limiting access to cash, ATMs, or online banking. Food, drug, and other retail stores where you shop may be closed or unable to restock shelves. This store was temporarily closed following the 2001 magnitude 6.8 Nisqually, Washington, earthquake

(photo courtesy of The Olympian, Olympia, Wash.)

This bank was damaged in the 2001 magnitude 6.8 Nisqually, Washington, earthquake, requiring customers to seek services elsewhere. (photo courtesy of The Olympian, Olympia, Wash.)

Will you be able to recover financially? You are still responsible for your existing debts, such as mortgage, lease, car, and credit-card payments. You may not have access to important financial records. Your assets are at risk without sufficient earthquake insurance. If you have earthquake insurance and experience loss, begin working with your insurer to file a claim as quickly as possible.

Will your insurance cover your losses? Homeowner's and renter's insurance policies do not cover losses related to earthquakes. A separate earthquake insurance policy is one way to help protect your home, in addition to seismic retrofitting. Earthquake insurance also helps with additional living expenses in the days and weeks after earthquakes. A staggering 86% of California homeowners do not yet have earthquake insurance.

Does your small business have a recovery plan? A business disaster recovery plan will make your business better able to survive in a post-disaster environment. Although physical assets can be replaced, emotional and social changes that affect businesses and their customers may remain long after a disaster. Businesses may not return to their previous revenue levels after a disaster; however, some businesses such as construction are likely to be in great demand following an earthquake.

These small businesses in Santa Cruz, California, were heavily damaged in the 1989 magnitude 6.9 Loma Prieta earthquake, but both eventually reopened. (USGS photo)

What will the Government do for you? Federal disaster relief programs are designed to help you get partly back on your feet but not to replace everything you lose. The Department of Homeland Security's Federal Emergency Management Agency (FEMA) is tasked with responding to, planning for, and mitigating disasters. After the President signs a major disaster declaration, FEMA cooperates with other agencies, such as the Small Business Administration (SBA), in providing disaster relief. The primary form of disaster relief is low-interest loans to eligible individuals, homeowners, and businesses made available through the SBA to repair or replace damaged property and personal belongings not covered by insurance. The maximum SBA personal-property loan is $40,000, and the maximum SBA real-property loan for primary home repair is $200,000. FEMA disaster grants for emergency home repairs and temporary rental assistance are only available to individuals and households who do not qualify for loans. The average FEMA grant is less than $15,000 (the maximum is $26,200)&emdash;not enough to rebuild a home in the Bay Area! The Farm Service Agency (FSA) offers loans to assist agricultural businesses.)

This home in the Santa Cruz Mountains, California, collapsed in the 1989 magnitude 6.9 Loma Prieta earthquake. (USGS photo)   Useful Web sites Financial preparation information: http://www.redcross.org/services/disaster/0,1082,0_605_,00.html http://quake.abag.ca.gov/business/ Operation Hope Emergency Financial First Aid Kit (EFFAK): http://www.operationhope.org/ (Note: Both English and Spanish versions of the EFFAK are available at this site.) Disaster aid information: http://www.fema.gov/about/process/

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