How A Personal Loan Helped One Woman When Insurance Didn’t

Terri Graham is 5 feet, 2 inches tall, so if she stepped off her porch during the worst of the 2023 flood, water would encircle her waist.

Graham’s upstate New York town suffered a 1,000-year flood on July 9, 2023, and soon after, the governor declared a state of emergency. Nearly six inches of rain fell within a few hours that evening and would cause more than $1 million in property damage.

“It started in a town called Bloomfield — that’s where the watershed starts,” says Graham, who works as a sales and account manager for a small business near her home in Canandaigua, New York.

Unfortunately for Graham and her neighbors, her home insurance considered the extremely rare event “an act of God” that wasn’t covered by her policy.

So, without insurance — and not wanting to gut her savings — Graham handled the financial aspects of her emergency the way she overcame three other surprise situations in recent years: by borrowing a personal loan.

An unforeseen emergency leading to an unsecured loan

The storm was forecasted just two days before it arrived. Graham was interviewed on the local news about the run-up.

“We thought we were prepared,” she says. And while she prepared as much as she could with sandbags, it didn’t stop the waters.

Without a mandatory evacuation, Graham and her mother, who can’t swim and was unable to board a rescue boat out of town, instead hunkered down. They went 10 days without power and 12 without clean drinking water.

Perishable food in the fridge and freezer was lost. Appliances in the basement — including a water heater, furnace and electric panel — would need replacing. And Graham needed to stall mold growth with high-end humidifiers and air purification systems.

“I didn’t want to run out and put them on one of my credit cards,” Graham says. Other costs, like hiring contractors, were likely to arise, and maxing out a credit card would have left her without funding.

But that was for later. In the storm’s immediate aftermath, Graham and her neighbors were in damage-control mode. Some were attempting to drive their cars like boats, causing wakes to push more water into homes like Graham’s. She called 911, phoned the fire department and saw that everyone, from first responders to her neighbors, were “overwhelmed.”

“So, at the beginning, I was thinking, ‘Everything’s going to be OK. Well, we’ll be able to get through this. It’s not a problem,’” Graham recalls. “And then when insurance adjusters started coming around and giving the news that these were things that they weren’t going to be able to help out with — was when I was like, ‘I really need to get moving because I’m not sure how long it’s going to take to get funding.’”

Borrowing a personal loan under dire circumstances

Graham estimates that three to four days after getting the bad news from her insurance provider, she considered on borrowing a personal loan.

“Some people might’ve had more savings or things like that, but I didn’t have that to fall back on,” Graham says.

She also feared maxing out her credit card or emptying her emergency fund. Local officials had said power outages might span months.

Graham went straight to online lender Best Egg. She had borrowed and repaid three personal loans from the company in the years since 2015 and appreciated its offer to amend her loan terms if she ever ran into financial difficulties.

I bet you we’re at least twice the industry average in terms of adjustments to payment schedules as a result of customer needs. When COVID hit and there was a lot of fear out there of what was going to happen, we built a ton of programs, and the positive feedback we got from customers on kind of being there when they needed us or when they thought they were going to need us… Having that flexibility when people were kind of at their highest point of nervousness, it built a lot of loyalty with our consumer base.

— Bobby Ritterbeck
President, Best Egg

So, with the flood receding, Graham went about estimating the damage, mostly to her basement. After getting quotes for bigger-ticket items and contractors to install or repair them, she settled on $10,000, to be repaid over five years.

“I didn’t want to take out too much,” Graham says. “I didn’t also want to leave myself short, and then I was going to end up having to utilize my credit cards anyway.”

What to learn from Graham’s personal loan borrowing experience

Graham has about three years remaining on her personal loan repayment. She expresses confidence that the 2023 ordeal will end with a zero loan balance, like her past Best Egg borrowing.

Graham says she’s grateful that the Best Egg loans came just as she needed them, helping her to avoid higher-interest debt and credit damage.

Hopefully, you can find relevant lessons from Graham’s debt journey, too.

What’s your next step?

If you’re considering a personal loan, whether for an unforeseen or planned expense, consider Graham’s experiences and lessons. They can help you avoid common personal loan mistakes.

Also, if your finances aren’t in ideal shape, perhaps because you’ve had a run of bad luck, don’t forget to be your own biggest cheerleader. As Graham says: “Just because you’re financially stressed or you’re maybe really feeling the pinch, you can start over anytime. Make a positive change and keep moving forward, but give yourself a little bit of grace.”