Often one of the first steps to becoming more safe and secure includes performing a personal risk assessment, which consists of a home risk assessment and sets the stage for managing your risk.
The truth is that at some point, many of us have had it with leaving the protection of ourselves and our families up to fate. Instead, we decide enough is enough, and it’s time to take charge of our future safety and security. When that happens, if you want to be effective and efficient with your time, effort, and resources (including money) you’ll need to take stock of the threats you face and the vulnerabilities you have to those threats.
Taking stock of your threats and vulnerabilities is a less technical way of stating that you will conduct a personal risk assessment. After all, unless you perform a personal and home risk assessment, managing your risk will be at best, a guess. If you’re okay with guessing about your future safety and security, then the rest of this episode may not be for you.
In this episode on Personal Risk Assessment
- What is Risk?
- The Bottom-Up Risk Assessment
- Risk Assessment Overwhelm and Worry
- Managing Your Risk
- Decreasing Your Risk
- Quantifying Risk
- Controlling Risk
What is Risk?
Before we dive into risk assessments though, let’s discuss exactly what risk is. Risk is when we know a potentially lousy situation can happen to someone or something. However, at the same time, we don’t know when or if it will happen. For example, in my case, every time I cook food, there is a risk of it tasting awful! However, I don’t know when I’ll whip up that terrible tasting meal. Ultimately, it depends upon some factors. Those factors include points such as the freshness of the ingredients, my knowledge, and ability around the kitchen, combined with the randomness of chance.
Similarly, the same is valid for risk related to our safety and security. It’s no secret that we all run the risk of having our cell phone stolen. Unfortunately, while we know people take cell phones, we don’t know if, when, or where it will happen. In other words, risk is something that we know is possible, but at the same time, we don’t know if it will ever happen to us.
Another way of looking at risk is to consider it as the probability of an unfortunate event happening. Now, if you eliminate the possibility of something wrong happening, you’ll remove the risk. Unfortunately, as we’ll discuss later, the potential to eliminate all risk is highly unlikely. Heck, I’ve spent decades working in professions that attempt to eliminate risk. Unfortunately, in spite of that, I can still break myself on occasion or have other bad things happen.
The Bottom-Up Risk Assessment
A personal risk assessment, or home risk assessment, is required when managing your risk. The purpose of performing a personal risk assessment is to identify potential risks, their chances of occurring and their potential impact. While there are various ways to assess risk, for our purposes, we’ll use the more straightforward to implement, bottom-up approach.
The bottom-up personal risk assessment requires that we identify as many of our potential risks as possible. In other words, before you start making safety and security plans, sit down with a pad of paper. Then, make a list of all the potential risks that you think could impact you, your family and home. Another great way of creating that list is to have a brainstorming session with friends and family who can help expand on your list of possible risks.
Risk Assessment Overwhelm and Worry
It’s good to know up front that some people may feel overwhelmed and worried when brainstorming potential risks. If that happens, remember that it’s normal to feel that way. Thinking about the potential for future problems can be difficult for some. However, while it may be difficult, it’s good to consider that most of us get nervous when first thinking about unknown possibilities. The fact that we’re thinking about unpleasant options makes it even worse.
One way to overcome the unpleasantness, overwhelm, and worry is to think less about the potential problem and more about the results. So, instead of thinking about the possible crime, disaster, etc., focus on the effects that being prepared for the potential problem will bring. In other words, focus on the fact that the great effort you’re putting into your personal risk assessment now will result in a much better outcome later.
Sure, a criminal could target your home, which is terrible. However, because of your self-reliance, personal risk assessment, planning, and desire to succeed, you’re setting yourself up for success. Because of your efforts, you are much more likely to have the criminal pass on by your home. If, however, the bad guy does cause you problems, your positive actions will help put you on the winning side of the situation. In this case, the winning side means that you and your family are more safe, secure and protected.
Managing Your Risk
Managing your risk, or risk management is the process of identifying, evaluating, and ranking risks, which establishes your risk baseline. With your risk baseline established, you will be able to manage the use of your resources to reduce, monitor, and somewhat control the possibility of something terrible happening. Additionally, if something terrible does happen, managing your risk provides you with the knowledge and opportunity to reduce the adverse effects of whatever bad situation you find yourself in.
The Three Risk Assessment Questions
When managing your risk, you must begin by performing your risk assessment. A simple way to conduct your risk assessment is to ask yourself these three questions:
- What can go wrong?
- What’s the chance that it could go wrong?
- If it goes wrong, what are the effects and impact?
The Three Risk Management Questions
After you answer the three risk assessment questions, you should have an idea of your threats and vulnerabilities. You’ll also know the likelihood that one or more of those threats or vulnerabilities may cause you problems. Next, if something terrible does happen, what will the aftermath be.
Once you understand all of that, it’s time to start managing your risk. To manage your risk, you will need to ask yourself these three risk management questions:
- What options do you have available to minimize or eliminate the risk?
- Are there any current laws, rules, regulations, etc. that will impact your options in the future?
- Of the options that are obtainable and either benefit or suffer the least from laws, rules, and regulations, which is the most efficient?
With answers to those questions ready, you’ll be able to determine what your best solutions are for managing your risk. In the end, the best practice for managing your risk revolves around informed decision making and the establishment of your risk baseline.
Decreasing Your Risk
Unfortunately, when managing our risk, we are not able to eliminate it all from our lives. Risk, by its nature, is unpredictable. Humans, Mother Nature, and the random chance of Murphy causing problems makes eliminating risk nearly impossible. Therefore, when working on your safety and security, it’s best to do what you can to decrease your risk in the most efficient way possible.
You can decrease your risk in a number of ways:
- Detecting and averting a threat before it can happen.
- Physically protecting against a threat that goes undetected.
- Minimize the effects of a threat that does impact.
It’s also important to know that avoiding risk requires collecting information and then taking preventative action based on the information. For example, you gather information when a neighbor tells you that there are squirrels in her attic. So, using that information, you take preventative action by sealing your attic to decrease the likelihood of having squirrels in your attic.
After working through the personal risk assessment and home risk assessment process, it’s time to quantify or express our risk. Quantifying our risk allows us to rank the riskier areas of the world around us. When it comes to quantifying risk, it’s best to focus on threat, impact, and vulnerability.
By focusing on the threat, we study a mixture of such things as our opponent’s intent and abilities, along with the frequency of occurrence over a specified period, and the probability that a specific adverse outcome will affect us.
Impact is the adverse outcome that happens. For example, if my truck is stolen, the negative result that happens includes losing the ability to drive to work, the store, etc. My ability to have a second car or the ability to rent one helps to lessen that impact, but it’s an impact nonetheless. Additionally, the ability of the measures taken to deter, detect, delay, deny, and defend against a threat also can minimize, or eliminate the impact.
Lastly, vulnerability includes the flaws and limitations of the system we put in place to mitigate our risk. Should we NOT take actions to minimize our threat, we’ll have a significant vulnerability. It’s our vulnerabilities that bad guys can seize upon to achieve their goals that have an adverse effect on us.
The ultimate goal of personal risk assessments, home risk assessments, and managing your risk is to control risk. Controlling risk is focused on minimizing the impact of a risk, or risks, on the lives of you, your family, and friends. You can achieve that goal in a number of ways. Risk avoidance, reduction, transfer, and acceptance are all ways we can reduce our risk. Which method you choose is dependent upon your specific situation.
As discussed earlier, risk avoidance is our attempt to prevent the risk from manifesting itself completely. After all, if we can stop the risk from happening, we shouldn’t suffer any negative consequences from it.
Risk reduction is the implementation of an overarching strategy that aims to lessen the impact of a risk. For example, if you live in a flood zone, your ability to stop a flood is zero. However, by elevating your home on pilings, you reduce the potential impact on your home from the flood. Does that mean your living room won’t be underwater? No, it doesn’t. What it means is that, while possible, it is less likely that you’ll have to share your sofa with fish and alligators after the flood passes.
With regard to transferring risk, we take our risk, such as the cost of replacing a car if it’s stolen, and transfer that risk to an insurance company. Granted, fine print and misunderstanding sometimes come into play. However, the theory and intent of transferring risk remains.
Lastly, is risk acceptance. Risk acceptance happens when we decide that the impact of the risk is not worth the time, effort, or resources it takes to counter the risk. In other words, if our car is old, beat up, and of little value, we may elect not to insure it against theft. In this case, we are deciding that the risk of them getting stolen outweighs the cost of insuring it.
To recap this episode, when managing your risk, it’s crucial that you understand what risk is and have a process for assessing risk.
When conducting a home risk assessment, remember not to become overwhelmed or worried as you work through the process. Instead of worrying and feeling overwhelmed, try to focus on how much better off you’ll be once you have addressed your risks.
Once you assess your risks, you’ll next need to work on managing those risks. Managing your risks has the goal of decreasing the risk, or if possible, eliminating it.
However, to make sure you make the most out of your risk mitigation efforts, you’ll need to quantify your risks by examining and prioritizing them. Finally, once you have a handle on your risks, you will want to put in risk control measures. It’s these risk control measures that aid you in addressing the risk in the most efficient means possible, thereby maximizing the effectiveness of your time, effort and resources.
Never forget, you’re just one prep away.
If you have any other thoughts or questions about personal risk assessment, home risk assessment, or managing your risk, please leave a comment below. Don’t forget home invasion statistics too!
Stay safe, secure and prepared,
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