catastrophe risk management | October 29, 2012

Life After Hurricane Sandy: Risk-Management Speaker Erwann Michel-Kerjan

If you were among the victims hit hard when Hurricane Sandy made landfall this week, risk-management speaker Erwann Michel-Kerjan has some suggestions on how you can start to put your life back together. The massive precipitation and gale-force winds that accompanied the recent storm flooded a large portion of New York and New Jersey (and some cities in southern Canada) after it headed inland and wreaked havoc on the bustling metropolis. Unfortunately for the many residents whose homes and cars are submerged underwater, Michel-Kerjan writes in a blog entry that: "Traditional homeowner insurance coverage DOES NOT include flood risk. Unless you have an additional flood insurance policy...then you are on your own, more or less."

Who then, will pay for the massive damages associated with the storm? The disaster relief funding that will begin pouring into each state will be limited, he notes, and will go toward fixing public infrastructure rather than helping the individual citizens to repair their homes. Michel-Kerjan offers two possible, though not perfect, solutions for those who have been hard-hit by Sandy:

FEMA’s Individual Assistance: This is a grant from the government that caps out at $30,000

2) Small Business Administration Low Interest Disaster Loan Program
:  A short-term loan that has to be paid back to the government with interest penalties.

Though there is a possibility that these options may help get you out of a pickle, many residents will be left to their own devices to deal with the cost of this past storm. Erwann Michel-Kerjan has made a living helping businesses, top policymakers, and organizations around the world be better prepared for natural disasters and other catastrophic events. He serves as the Chairman of the OECD Secretary-General Advisory Board on Financial Management of Catastrophes, and teaches risk management and value creation at the prestigious Wharton School of Business. His talks explore the highly chaotic world that we live in, and he teaches audiences how you can not only be prepared for catastrophes, but benefit from being better prepared than your competitors.

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