Should I stay or should I go? Deciding to rebuild or relocate after disaster

If your home sustained significant damage in a natural disaster, would you relocate or rebuild?

The answer might seem instant, even simple in the abstract. “Of course I would rebuild; I’ve been here for years. I love it,” or “It’s our safety over everything. We’d move on to a place with less risk.”

But you might find in the moment, in the face of an event that feels impossible, your answer changes – or is, at least, much more complicated than you expected.

“It’s difficult to fully appreciate the nuance of the decision and the emotion you might feel about it until it’s one you actually have to make,” says Lauren Ahern, a director of private wealth premier solutions at Raymond James.

In the wake of disaster, some who thought their roots were forever planted might be surprisingly willing to walk away, while others a little more dispassionate about the idea of home could find themselves with reasons to stick around.

Even if you don’t anticipate this question being one you’ll ever confront, considering it now can ensure that even if you think you know your answer, you also know your options.

It starts with insurance

Before you can compile a pros-and-cons list, the types of insurance policies you hold – and the contingencies they include – will make some of the decisions for you, at least initially.

Homeowners 

Homeowners insurance typically protects a primary dwelling and related structures from things like theft, vandalism, and water damage from leaks, as well as natural events like earthquakes, wildfires, hurricanes and convective storms – those nontropical storms that produce tornadoes, torrential rain and severe lightning inland.

Wind and hail

In certain areas at high risk for hurricanes or tornadoes, homeowners policies may limit or exclude wind and hail coverage, requiring separate insurance.

Flood

Distinct from homeowners, flood insurance protects homes from rising water due to natural events. It’s often a condition of securing a mortgage in places prone to flash floods, storm surge, river-and-stream flooding and closed-basin flooding in lakes. This coverage is typically limited to a primary structure and does not extend to outbuildings or vehicles, and, unlike homeowners insurance, it doesn’t include loss-of-use provisions to cover the cost of temporary accommodations.

Supplemental or specialized

High value home insurance can offer extra layers of protection for luxury homes, as can waterfront and coastal policies. And high value item insurance or specialized collections coverage can be used to protect non-structure valuables like fine art and antique or recreational vehicles. There are also high-net-worth carriers that allow homeowners to opt for cash settlements of their policy limits in lieu of rebuilding.

Self-insuring

As the cost of coverage continues to rise – to the point of pricing even the ultra-wealthy out of high-risk areas – some homeowners are planning to fund their own protection. “In Florida in particular, we’re seeing cases where a homeowner will buy coverage for all the other perils and fortify their homes, then self-fund for flood,” Lauren shared.

Timing could be everything

The stage of life you’re in will be a decisive factor in the decision-making process – if not the biggest.

Those just starting out likely have the flexibility to move on with relative ease, though that flexibility could also mean ample time to accommodate extensive repairs or improvements.

People in the thick of successful careers and family lives may be likelier to reinforce the stability of the homes and communities they’ve built to this point.

And homeowners nearing or in retirement might find time a more precious investment and opt for the faster resolution of a fresh start.

If I stay

Once the proverbial dust settles and you’ve satisfied any insurance requirements, choosing to stay is the beginning of what could be a months- to years-long process, depending on the condition of your home. That’s not to say it won’t ultimately be a rewarding experience, but the time investment will be a significant factor.

This may prompt you to self-fund repairs to create efficiencies, particularly if your disaster impacted a large number of homes, but keep in mind this could invite personal liability.

The decision to stay will also invite its own questions.

Do I rebuild or build new?

While the extent of the damage may answer this question, even in cases where a property is salvageable, you might consider starting fresh. This could result in a structure better able to withstand harsh conditions if you live in a higher-risk area and could ensure you’re meeting new building codes, which are often revisited and revised after communities experience disaster.

If you’re inclined and able to rebuild your home to its previous state, there could still be opportunity for improvement. For instance, if your home is historic, this is your chance to attend to restoration you’d previously put off. And if you’ve had upgrades in mind, include them in your bid requests.

Follow the letter or fully fortify?

Mitigation and resilience are buzzwords for a growing number of homeowners, including many whose investments are solely preventative. According to Lauren, the preparation conversation is no longer confined to traditionally risky areas like the coasts or wildfire country, but for people across the US. And many of them are choosing to reinforce their abodes beyond local requirements.

In the case of fire resilience, homes now increasingly feature ember-resistant venting, gutter guards, defensible perimeters and noncombustible vegetation. And along coastlines, you’ll see impact-resistant glass, hurricane-rated garage doors, hurricane ties for roofing, as well as homes being lifted and flood-proofed.

If I go

If the prospect of rebuilding or staying in a high-risk area feels too daunting, it’s time to start weighing your relocation options.

There will still be a time investment – considering whether to move to a less risky area close by or to make a bigger geographic leap and subsequently finding and touring potential properties – but this route can get you to a sense of relief and back into a habitable home faster.

Stay local or move on out?

As with rebuilding, if you intend to stick around the same area, mitigation will be a factor. You’ll need to find a home equipped for future disaster, which could mean expanding your search to include higher price points or narrowing it to new construction exclusively. And if you plan to move on to a new part of the country, make sure to research its environment to ensure you aren’t trading one risk for another.

Take a loss or take your time?

You’ll also need to contend with what could be a more complex selling process for your current home. Is its value greatly reduced? Is the whole neighborhood for sale? If rebuilding wasn’t a condition of your insurance settlement, it may still be a route you need to take to get more value for your home.

Stick to the timeline or jump ahead?

While leaving a current home might feel like saying goodbye to one goal, it could be a chance to hit fast-forward on some others. If you’ve always imagined moving to a certain place “someday,” see if someday could start now. And if retirement is not too distant on your horizon and you plan to downsize, see if tomorrow’s relocation plan is one you can implement today.

One important thing not to lose sight of in the wake of disaster and the pressure of a major decision, is the emotional impact of moving on. Leaving a place you’ve called home is likely to stir up a heady mix of feelings. You can honor them by taking a piece of your old place with you or leaving a part of yourself behind – things like salvaging a beloved architectural feature to be incorporated into your new home or planting a tree to memorialize your family’s connection to a place you loved.