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71 insurance policy covers losses "caused by explosion, fire, lightning, hail, windstorm, hurricanes, tornadoes, extreme cold, volcanoes, and theft." Disasters such as flooding (no matter the cause) and earthquakes are not covered. While homeowners' insurance does cover damage from hurricanes, the coverage is limited. Any flooding damage resulting from a hurricane is not covered unless homeowners purchase a separate flood insurance policy. At this point, it's important to mention that flooding is the costliest natural disaster in the United States—in particular, coastal flooding. Now, the question is: how big of an effect do these payouts have on affected residents? All these sources of assistance and relief are unable to fully protect affected persons from financial hardship. A significant percentage of applications for disaster-related assistance are turned down, and not every form of assistance is available all the time. Disasters cause major disruption for those in the housing market, leaving people unable to pay their bills in full and on-time in the months after a disaster. In some cases, the impact is so severe that it negatively impacts residents' long-term financial health, leading to increased delinquency and foreclosure rates. NATURAL DISASTERS AND THE HOUSING MARKET e ripple effects of natural disasters leave residents earning less and spending more, which further deteriorates their financial health. A disaster leaves borrowers in a predicament where they have to choose between spending their savings on survival essentials and short- term repairs and their expenses. A natural disaster leaves a path of destruction, and the negative impacts persist or even grow over time. As a result, banks, lenders, and servicers should have a contingency plan for natural disasters. A primary concern is giving borrowers and their families' relief in the short term so they can meet their financial obligations in the long term. Giving those affected by disasters the ability to "press pause" allows them to meet the immediate repair and rental expenses, if any, without worrying about a mortgage. A disaster preparedness plan should also include: » Spatial mapping of properties and hazards » Damage estimate modeling » Reconstruction cost specificity is way, the disaster plans can be modified based on the severity of the situation. e impact of disasters on the housing market cannot be overstated. Catastrophic events destroy homes and displace residents. Typically, residents stay within the local area as they rebuild their homes and finances, which can increase the demand for housing in neighboring cities. For this reason, disasters are accompanied by rising rent and home sales. PROTECTING HOMEOWNERSHIP IN THE WAKE OF INCREASING DISASTERS Natural disasters will only increase in frequency and severity due to rising global surface temperatures. Will these events bring about increased delinquency rates over the coming years? If history is anything to go by, yes, it will. For this reason, lenders and servicers must increase risk mitigation measures by incorporating damage estimates and reconstruction costs in their evaluation of risk to protect themselves and their borrowers in the event of a natural calamity. John omas is a content creator and disaster preparedness author from Hoboken, New Jersey. When not writing for ATI Restoration, omas enjoys camping, reading true-crime fiction, and spending time with his family and two Golden Retrievers. Giving those affected by disasters the ability to "press pause" allows them to meet the immediate repair and rental expenses, if any, without worrying about a mortgage.