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5 Common Financial Emergencies That Can Appear Without Warning
While you may have many rather uneventful days in your life, there are also usually more than a few days over the course of life that may cost you a small fortune. You may actively plan for life’s emergency situations by buying insurance, saving money in your rainy day fund and taking other steps as necessary to bolster your financial standing. However, it is important to understand what some of the more common financial emergencies in your life may be that often can appear without warning so that you can more fully plan for them.
A Natural Disaster
Natural disasters like floods, earthquakes, tornadoes, hurricanes, fires and more are common, and they affect many people each year. You may have homeowners insurance to pay for most of your expenses related to a natural disaster, but you will generally still need to pay your insurance deductible. In addition, in an extreme case, you may have to also pay a deductible on your vehicles if they were damaged. If you or your family members were injured, medical costs can mount as well. Even when you are well-insured, a natural disaster can cost you a small fortune. If you are not well-insured, the financial impact of a natural disaster can be devastating.
A Plumbing Emergency
Plumbing issues are unfortunately common, and many will require immediate repair work to be completed. Some severe issues, such as a major leak or a backed up sewer line, may cause property damage, loss of furniture and even the need to temporarily relocate in some cases. Some of these expenses may be covered by a homeowners insurance policy, but this is not always the case. Many homeowners will pay for all repair and restoration costs out of their own pockets.
Job Loss
Some people will see warning signs of a potential job loss months before it occurs. For example, you may notice that sales are lagging or that your company is cutting back on fringe benefits and expense accounts. Others, however, will have little or no warning before they are laid off. They may feel confident in their position, and the announcement of their layoff may take them by surprise. This can result in an immediate cessation of income until a new job is found.
A Sudden Illness or Injury
Illnesses and injuries can arise out of the blue, and they may result in expensive medical bills as well the need to take time off of work. Even with health insurance, you may still have to pay high expenses for hospitalization, surgery, lab tests, medication, therapy and more. Some conditions may result in disability that makes a career change necessary.
Death
Death may be an inevitable part of life, but it is also an event that most are not prepared for. Many deaths are caused by accidents or sudden and severe illnesses, such as a heart attack. While some people may die suddenly, others may spend a few hours or days in the hospital before death, and this can create medical bills for the surviving family members to pay for. This is combined with funeral expenses and loss of income in some cases.
Buying insurance is one of the best steps that you can take to prepare for an emergency, and there are many types of coverage available. These include health, life, homeowners, auto, disability and other types of coverage. In addition to buying insurance, ensure that you always have enough money on hand to pay for the deductibles for each type of policy that you have. Keep in mind that there may be instances when you have to pay deductibles on multiple insurance policies at the same time.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, supplier of personal and business checks.
