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Even the live-it-up relatives who didn’t save deserve help when house is lost to hurricane

When natural disaster strikes, character can be tested.

During a recent online discussion, a reader asked what to do to help relatives who lost their house in New York to Hurricane Sandy.

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But, the reader noted, the family had also “squandered” a $300,000 inheritance, purchasing “two expensive cars, a high-end computer, and tech equipment, which were all also lost in the storm. This is a pattern that has been repeated a few times with this particular couple.”

There was not enough insurance to cover the couple’s losses (they did not have flood insurance) and government support has been minimal, the family member said. For most people and businesses, the only insurance protection against damage from rising water is coverage underwritten by the National Flood Insurance Program. Standard homeowner and renters insurance policies do not cover flood damage.

“What do I and the other concerned siblings do in such an event?” the reader asked. “We could all provide some form of help, though none of us is wealthy by any means. I find myself debating not funding my child’s college education for a year to help them out. But I become so angry at the thought of all the money they wasted.”

Insured losses from the storm are estimated to range from $10 billion to $20 billion, according to Eqecat Inc., a risk-modeling firm.

It says the total cost of the storm, including uninsured damage, could be as high as $50 billion.

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Even the most financially savvy families can find themselves struggling after a natural disaster. Out-of-pocket expenses can drain your savings. If you are unprepared, the financial aftermath can be devastating.

I understand the siblings’ fear they would be rewarding bad behavior. It’s hard to be magnanimous when you have been pinching pennies but the family now in need had been living large.

I often get e-mail from readers who complain they’ve done everything right and now the reckless are being rewarded. Not fair. But isn’t that what life is? You are in a position to help. So do you?

Yes, you do. You help if you can afford to. For one thing, you help because perhaps there was a time — or will be a time — when you got help you didn’t deserve.

Before you burst a vein, I’m not saying you shouldn’t be responsible or discerning with your aid. But we can’t have a test for who deserves help and who doesn’t. It’s inevitable that when you give, you may be giving to someone who should have done better. Still, you give from the heart, simply because of the need.

I think the siblings should pitch in to help if they can afford it. And if the way to afford helping is to pull back on contributing to a college savings plan, I’d be OK with that — maybe not for a year, but I could see earmarking some of the money to help the family. You can catch up later, even if you have to cut some expenses. Think of the example you are setting if you have children.

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