Hurricane Irene: A Financial Disaster

While it seems we were spared the brunt of the storm, this storm had its costs.

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Loss of life is always the most devastating part of any significant weather event. Unfortunately, every major storm seems to bring casualties, but the lower the numbers, the better.

There is another loss to consider. One that is quantifiable and far reaching. That is the financial loss.

Hurricane Irene caused a significant financial loss to the country as a whole, but especially the East Coast. And that loss came from many areas.

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Let's begin with real property damage. Usually referred to as 'insured loss,' property damage can be catastrophic in any storm. Continuous winds of 50 to 100 miles per hour or more can cause even the most stable of buildings to sustain damage, sometimes irreparable. From shingles coming off a roof, to signs falling down or even buildings tumbling over, wind damage can be ruinous.

Even worse than wind, water damage can be catastrophic. Consider the stories you have heard about what water can do. From pushing beach houses from their pylons, to washing out bridges or even to causing cars to float down a flooded street, water can and does cause some of the worst damage.

Covering this 'insured loss' trickles down to you. Insurance companies usually pay for much of it, but only after a deductible is met. If a storm brings too much damage for these companies to manage, your insurance premiums see an increase to help them offset the loss.

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The cost of goods and services we use on a daily basis often increase. Prices for things like plywood and roofing shingles go up as does the cost of fruits and vegetables whose harvests are decimated.

When oil rigs are shut down or damaged by a storm, supply is reduced and fuel prices rise.

When airline flights are cancelled, the price of jet fuel is reduced, but often the price of flights is increased to help the airline recover from lost fares.

Even when the city of New York decided to shut down their subway system for the first time, due to weather, and Amtrak cancelled trains up and down the east coast, thousands of businesses were affected. The lost revenue was felt on all fronts. Theatres cancelled shows, cab drivers gave up fares, storefronts lost sales as did night clubs and service companies.

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Going a step further, is lost worker productivity. When people are displaced from their homes or when they cannot get to work due to lack of transportation, everyone loses: the worker, the business, and the customer.

So while it seems we were spared the brunt of the storm, and that damage could have been much worse, this storm had its costs.

Our markets are already in turmoil, so be sure that property damage, higher prices, and lost productivity will all have an impact on your investments. None of it will be good.

For now stay safe and be thankful for our hurricane preparedness program, for without it, things could have been much worse.

Good luck and happy investing.

Kelly Campbell, Certified Financial Planner and Accredited Investment Fiduciary, is founder of Campbell Wealth Management, A Registered Investment Advisor in Alexandria, Va. Campbell is also the author of "Fire Your Broker," a controversial look at the broker industry written as an empathetic response to the trials and tribulations that many investors have faced as the stock market cratered and their advisors abandoned their responsibilities to help them weather the storm.